information memorandum - mutual trust bank

“If you have any query about this document, you may consult the issuer and the trustee”

Draft

Information Memorandum

Private placement of 500 coupon-bearing non -convertible fully redeemable unsecured Subordinated Bonds of BDT 10,000,000 (Ten million Taka) each at par totaling BDT

5,000,000,000 (Five billion Taka).

Coupon Rate / Yield to Maturity: Latest average 6-month FDR rate of all private commercial banks excluding Islamic banks & foreign banks as published by Bangladesh Bank on the quotation day + 2.00%

Margin. Coupon Range: 7.00% - 10.00% at all times

Issuer:

Mutual Trust Bank Limited

MTB Centre, 26 Gulshan Avenue, Plot 5,

Block SE(D), Gulshan 1, Dhaka 1212

Trustee to the Issue: EBL Investments Limited

Type of Security: Coupon-bearing Non-Convertible Redeemable Unsecured Subordinated Bond

Face Value: BDT 10,000,000 of Each Bond Issue Price: BDT 10,000,000 of Each Bond

Total Issue Amount: BDT 5,000,000,000 (divided into 500 number of securities)

Credit Rating of the Bond: AA-B Emerging Credit Rating Limited

Lead Arranger Co-Arranger RSA Advisory Limited MTB Capital Limited

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Draft Information Memorandum Subordinated Bonds of up to BDT 5,000 Million

Notice & Disclaimer Mutual Trust Bank Limited (hereinafter referred as the “Bank” or the “MTB” or the “Issuer”) has authorized RSA Advisory Limited (hereinafter referred as “RSAAL” or the “Lead Arranger” and MTB Capital Limited (hereinafter referred as “MTBCL” or the “Co-Arranger”), hereinafter both Lead Arranger and Co-Arranger will be referred to as “Arrangers”, to distribute this Information Memorandum (IM) in connection with the proposed transaction outlined in it (the “Transaction”) and the bonds proposed to be issued in the Transaction (the “Bonds”).

This Information Memorandum is provided to prospective investors on a private and confidential basis for use solely in connection with the issue, offer, sale or invitation to subscribe or purchase the Subordinated Bonds. This Information Memorandum shall not be, in whole or in part, reproduced or used for any other purpose without prior written consent of the Arrangers.

This information memorandum has been prepared based on the information provided by the Issuer and the Issuer is solely responsible for its contents. The issuer will comply with all rules, laws and regulations and is responsible for obtaining all regulatory, governmental and corporate approvals for the issuance of the Bonds. The Issuer, having made all reasonable inquiries, confirms that this Information Memorandum contains all the information with respect to itself and the Bonds to be issued by it, which is material in the context of the Bonds; that the information contained in this Information Memorandum is true and accurate in all material respects and is not misleading; that the opinions and intentions expressed in this Information Memorandum are honestly held and that there are no other facts the omission of which would make any of such information or the expression of any such opinions or intentions misleading. The Issuer accepts responsibility accordingly.

The Arrangers have relied on the information provided by the Issuer and such information has not been

independently verified by the Arrangers. No representation or warranty, expressed or implied, is or will be

made, and no responsibility or liability is or will be accepted, by the Arranger or any affiliate of the Arrangers

for the accuracy, completeness, reliability, correctness or fairness of this Information Memorandum or any of

the information or opinions contained therein, and the Arrangers hereby expressly disclaim, to the fullest

extent permitted by law, any responsibility for the contents of this Information Memorandum and any liability,

whether arising in tort or contract or otherwise, relating to or resulting from this Information Memorandum or

any information or errors contained therein or any omissions therefore. By accepting this Information

Memorandum, investors agree that the Arrangers will not have any such liability.

Neither this Information Memorandum nor any other information supplied in connection with the Issue is

intended to provide the complete basis of any credit or other evaluation, nor should it be considered as a

recommendation by the Arrangers to the Issue that any recipient of this Information Memorandum (or any

other information supplied in connection with the Issue) should purchase or subscribe for any Bonds. Each

investor contemplating purchasing or subscribing for a Bond should make their own independent investigation

of the financial condition and affairs, and their own appraisal of the creditworthiness of the Issuer. Investors

are advised not to construe the contents of this Information Memorandum as investment, legal, accounting,

regulatory or tax advice. Investors are also advised to consult with their own advisors as to all legal, accounting,

regulatory, tax, financial and related matters, concerning an investment in the Bonds.

INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF THE INVESTMENT. IT IS RECOMMENDED THAT PROSPECTIVE INVESTORS CONSULT THEIR FINANCIAL, LEGAL AND OTHER ADVISERS BEFORE PURCHASING OR ACQUIRING OR INVESTING IN THE SUBORDINATED BONDS.

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Issuer’s Disclaimer All The Features of Mutual Trust Bank 4th Subordinated Bond are draft only and finalization of these features are subject to the approvals of concerned regulators. These features may be modified as per the directions of Bangladesh Bank and Bangladesh Securities and Exchange Commission or any other concerned regulators.

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Draft Information Memorandum

Subordinated Bonds of up to BDT 5,000 Million

Contact


(The Issuer)

Sayed Abul Hashem FCA, FCMA Mr. Muhammad Nurul Afsar SEVP, Group Chief Financial Officer SAVP, In-charge Group Finance

MTB Centre MTB Centre 26 Gulshan Avenue, Dhaka-1212 26 Gulshan Avenue, Dhaka-1212

Cell: +88 018 1924 4811 Cell: + 88 017 5559 3598 E-mail: [email protected] Email: [email protected]

RSA Advisory Limited MTB Capital Limited

(Lead Arranger) (Co-Arranger)

Mr. Mohammed Tajul Islam Mr. Khairul Bashar Abu Taher Mohammed Executive Director CEO & EVP

6, Gulshan Avenue (Level-3) MTB Tower (Level 3), Block-SW(H), Gulshan-1, Dhaka-1212 111 Kazi Nazrul Islam Avenue, Bangla Motor.

Cell: +880 1713 002 320 Cell: +880 1730 080 518 E-mail: [email protected] E-mail: [email protected]

Md. Farhad Ahamed Md. Ashadul Islam Head of Fixed Income and Equities Board Secretary and Compliance Officer

6, Gulshan Avenue (Level-3) MTB Tower (Level 3), Block-SW(H), Gulshan-1, Dhaka-1212 111 Kazi Nazrul Islam Avenue, Bangla Motor.

Cell: +880 1755 593 598 Cell: +880 1818 416 284 E-mail: [email protected] E-mail: [email protected]

EBL Investments Limited (The Trustee)

Mr. Mohammad Sayedur Rahman Mr. Muhammad Oliullah Siddique AVP, Primary Market Operations Officer.

Jibon Bima Bhanban (Ground Fl.), Jibon Bima Bhanban (Ground Fl.),

10 Dilkusha C/A, Dhaka – 1000. 10 Dilkusha C/A, Dhaka – 1000.

Cell: 01816-256599 Cell: 01924-515739 Email: [email protected] Email: [email protected]

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mailto:[email protected]









Table of Contents

Notice & Disclaimer ............................................................................................................................. 2

Issuer’s Disclaimer ................................................................................................................................ 3

Contact ............................................................................................................ ....................................... 4

Table of Contents ............................................................................................................................. ..... 5

1 Report to the Eligible Investors ................................................................................................... 9

2 Risk Factors and Management’s Perception about the Risks ................................................. 10

2.1 Interest Rate Risk ................................................................................................................... 10

2.2 Exchange Rate Risk ................................................................................................................ 10

2.3 Non-repayment Risk .............................................................................................................. 11

2.4 Prepayment, Call or Refunding risk ........................................................................................ 11

2.5 Security Risk........................................................................................................................... 11

2.6 Liquidity Risk ......................................................................................................................... 11

2.7 Management Risk ................................................................................................................... 12

2.8 Operational Risk .................................................................................................................... 12

2.9 Business Risk ......................................................................................................................... 12

2.10 Industry Risk .......................................................................................................................... 13

2.11 Market and Technology Related Risk ..................................................................................... 13

2.12 Risk Related to Potential or Existing Government Regulations .............................................. 13

2.13 Risk Related to Potential Changes in Global or National Policies ........................................... 14

2.14 Credit Risk ............................................................................................................................. 14

2.15 Reputation Risk ...................................................................................................................... 14

3 Use of Proceeds ........................................................................................................................... 16

3.1 Purpose of Issuance of Mutual Trust Bank 4th Subordinated Bond ......................................... 16

3.2 Plan Regarding Use of Proceeds from the Subordinated Bonds .............................................. 16

4 Features of the Debt Security ..................................................................................................... 17

4.1 Basic Features of the Instrument ............................................................................................ 17

4.2 Rate of Return, Yield to Maturity, Coupon/Discount Rate ..................................................... 18

4.3 Repayment Schedule .............................................................................................................. 19

4.4 Enforcement of Charges over Securities ................................................................................. 19

5 Description of collateral Security ............................................................................................... 20

6 Rights and Obligations of the Issuer ......................................................................................... 21

7 Rights, Duties and Obligations of the Trustee ......................................................................... 28

8 Rights and Obligations of the Eligible Investors ...................................................................... 36

9 Description of Mutual Trust Bank Limited............................................................................... 38

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9.1 Subsidiaries of Mutual Trust Bank Limited ............................................................................. 39

9.1.1 MTB Securities Limited ...................................................................................................... 39

9.1.2 MTB Capital Limited.......................................................................................................... 39

9.1.3 MTB Exchange (UK) Limited ............................................................................................ 39

9.2 Capital Structure (Consolidated basis) .................................................................................... 39

9.3 Business Description .............................................................................................................. 40

9.3.1 Products & Services ........................................................................................................... 40

9.4 Business Analysis Based on Solo Financials ............................................................................ 46

9.4.1 Asset Size & Growth .......................................................................................................... 46

9.4.2 Growth of Loans & Advances ............................................................................................ 46

9.4.3 Growth of Deposits ........................................................................................................... 47

9.4.4 Operational Performance ................................................................................................... 48

9.5 Profile of the Board of Directors ............................................................................................ 49

9.6 Profile of Senior Management ................................................................................................ 55

10 Description of Encumbered and Unencumbered Assets with Value Thereof ........................ 58

10.1 Encumbered Assets ................................................................................................................ 58

10.2 Unencumbered Assets ............................................................................................................ 58

11 Description of Assets and Liabilities ......................................................................................... 59

11.1 Description of Assets (Solo) ................................................................................................... 59

11.2 Description of Liabilities (Solo) .............................................................................................. 61

12 Description of Previously Issued Debt or Equity Securities .................................................... 63

12.1 Initial Public Offering ............................................................................................................ 63

12.2 Rights offering ....................................................................................................................... 63

12.3 MTB 1st Subordinated Bond .................................................................................................. 63

12.4 MTB 2nd Subordinated Bond ................................................................................................ 64

12.5 MTB 3rd Subordinated Bond ................................................................................................. 64 13 Auditors’ Report Along with Audited Financial Statements of Mutual Trust Bank Limited 66 14 Comparative Financial Statements of Mutual Trust Bank Limited for the Last 3 (Three)

Years ............................................................................................................................................ 150

14.1 Comparative Balance Sheet (Consolidated) ...................................................................................... 150

14.2 Comparative Balance Sheet (Solo) ..................................................................................................... 151

14.3 Comparative Profit & Loss Account (Consolidated) ...................................................................... 152

14.4 Comparative Profit & Loss Account (Solo) ..................................................................................... 153

14.5 Comparative Cash Flow Statement (Consolidated) ......................................................................... 154

14.6 Comparative Cash Flow Statement (Solo) ........................................................................................ 155 15 Financial Ratios for last 3 (Three) Years .............................................................................. 156

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16 Credit Rating Report of the Issue ............................................................................ ................ 157

17 Description of the Trustee ........................................................................................................ 191

17.1 Overview to the Trustee ....................................................................................................... 191

17.2 Board of Directors: .............................................................................................................. 191

17.3 Product and Services ............................................................................................................ 192

17.3.1 Non-Discretionary Portfolio Management:................................................................... 192

17.3.2 Discretionary Portfolio Management: ........................................................................... 192

17.3.3 Monthly Investments Scheme:...................................................................................... 192

17.3.4 Other Services: ............................................................................................................. 193

17.3.5 Key Operational Results ............................................................................................... 193

18 Due Diligence of the Trustee ................................................................................................... 194

19 Modus Operandi of the Issue including .................................................................................. 195

19.1 Application Procedure: ......................................................................................................... 195

19.2 Allotment: ............................................................................................................................ 195

19.3 Transfer: .............................................................................................................................. 196

19.4 Repayment: .......................................................................................................................... 196

19.5 Event of Default .................................................................... .............................................. 197

19.6 Termination and Final Settlement......................................................................................... 197

19.7 Indemnification .................................................................................................................... 198

19.8 Cancellation ......................................................................................................................... 198

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List of Tables and Figures Table 1: Basic Features of Mutual Trust Bank 4th Subordinated Bond ........................................................... 17 Table 2: Repayment Schedule of MTB 4th Subordinated Bond ....................................................................... 19 Table 3: Basic Information of the Issuer .............................................................................................................. 38 Table 4: Sources of Issuer's Fund .......................................................................................................................... 39 Table 5: Regulatory Capital of the Issuer .............................................................................................................. 40 Table 6: Shareholding Structure of the Issuer ...................................................................................................... 40 Table 7: MTB’s Operating Performance ............................................................................................................... 48 Table 8: Key Ratios for Last 5 years ...................................................................................................................... 48 Table 9: Composition of Total Asset .................................................................................................................... 59 Table 10: Details of Cash ......................................................................................................................................... 59 Table 11: Balance with Other Banks & Financial Institutions .......................................................................... 59 Table 12: Details of Money at Call and Short Notice ......................................................................................... 59 Table 13: Details of Investments ............................................................................................................................ 60 Table 14: Details of Loans and Advances ............................................................................................................. 60 Table 15: Details of Fixed Assets ........................................................................................................................... 60 Table 16: Details of Other Assets .......................................................................................................................... 61 Table 17: Description of Liabilities ........................................................................................................................ 61 Table 18: Description of Borrowings .................................................................................................................... 61 Table 19: Outstanding Balance of Subordinated Bonds..................................................................................... 62 Table 20: Description of Deposits and Other Accounts ................................................................................... 62 Table 21: Description of Other Liabilities ............................................................................................................ 62 Table 22: Financial Ratios of MTB for Last Three Years ................................................................................ 156 Table 23: Key Financials of the Trustee .............................................................................................................. 193

Figure 1: Issuer's Total Assets Size & Growth .................................................................................................... 46 Figure 2: Issuer's Total Loans & Advances and Growth ................................................................................... 47 Figure 3: Issuer's Deposit Size and Growth ......................................................................................................... 47 Figure 4: Historical Advance Deposit Ratio ......................................................................................................... 48

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1 Report to the Eligible Investors By investing in the Bonds, you are hereby deemed to have acknowledged, represented and warranted to, and agree (as the case may be) for the benefit of the Arrangers, as set out below:

High risk: You are fully aware that investment in the Bonds involves a high degree of risk.

Consultation with advisers: You have (i) consulted with your own legal, regulatory, tax, business, investment, financial and accounting advisers in connection herewith to the extent you have deemed necessary, (ii) collected and reviewed all information that you or your advisers believe is necessary or appropriate in connection with the purchase of the Bonds, and (iii) made your own investment decisions based upon your own judgment, due diligence and advice from such advisers as you have deemed necessary and not upon any view expressed by or on behalf of the Arrangers.

No reliance: You acknowledge and agree that you may not rely on any investigation that the Arrangers or any of its affiliates or any person acting on their behalf may have conducted with respect to the Issuer or any of their affiliates, and neither the Arrangers nor its affiliates, employees, officers, directors, legal advisers or representatives have made any representation to you, express or implied, with respect to your investment in the Bonds.

Informed decision: You are in possession of all the information that you believe is necessary or appropriate in order to make an informed decision regarding your purchase of the Bonds, including without limitation, adequate information concerning the Issuer’s business, financial condition, results of operations and prospects.

Knowledge and experience: You have such knowledge and experience in financial, business and international investment matters that you are capable of evaluating the merits and risks of purchasing the Bonds and are aware that you may be required to bear, and are able to bear, all risks including economic risk of an investment in the Bonds.

Information of the Company: You acknowledge that the information provided to you with regard to the Issuer and the Bonds in this Information Memorandum has been supplied to you by the Arrangers only on behalf of the Issuer and that neither the Arrangers nor any of its affiliates, employees, officers, directors, legal advisers or representatives has verified such information or makes any representation or warranty as to its accuracy or completeness.

Review of Information Memorandum: You have reviewed this Information Memorandum in its entirety, including the risks associated with investment in the Bonds, and you understand and acknowledge all of the risks described herein. By investing in the Bonds, you have determined that:

i. the Bonds are a suitable investment for you and your investment in the Bonds does not and will not, when consummated, violate any investment or other guidelines, policies or restrictions (corporate or otherwise), or any law, rule, regulation or order applicable to you; and

ii. you have obtained all approvals and consents (whether internal or external), and have made all notifications necessary for you to invest in the Bonds as contemplated; and you can bear the economic risk of the investment and are able to sustain a complete loss in connection with your investment.

Own account: You are purchasing the Bonds for your own account and not with a view to any distribution thereof.

No representation or warranty: The Arrangers has not made, and you have not relied upon any representation, warranty or condition (express and/or implied), and the Arrangers shall not owe any duty whatsoever to you in connection with the Bonds.

No obligation to purchase: The Arrangers shall have no obligation to purchase or acquire all or any part of the Bonds purchased by you or to support losses, if any, directly or indirectly sustained or incurred by you for any reason whatsoever in connection with the Bonds, including the non-performance by the issuance, whether to you or otherwise.

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2 Risk Factors and Management’s Perception about the Risks Mutual Trust Bank Limited (The Issuer) operates in the banking industry which is cyclical and hence is exposed to several risk factors arising from external as well as internal matters. Moreover, any investment in debt securities carries risks. Since different debt securities carry different risks, an investment in debt securities has to be evaluated on its own merits.

Investment in MTB 4th Subordinated Bond is in that respect no different. Potential investors are strongly encouraged to carefully evaluate all the information in this Information Memorandum, specially the risk factors both internal and external on their own merit and not by referent to any other debt securities whether of a comparable nature or otherwise before making any investment decision.

This section addresses the possible risks an investor might have to bear by investing in the bonds and each risk factor is followed by management’s perception regarding the risk. If any of the risks described below materialize, it could have a serious impact on the Issuer’s financial results and the ability of the Issuer to fulfill its obligations under the Bonds to be issued. However, the list of risk factors explained below is not meant to be a comprehensive description of all risks which may be relevant to investing in the Bonds. The sequence in which the risks below are listed is not intended to be indicative of any order of priority or of the extent of their consequences.

2.1 Interest Rate Risk Interest rate risk is the risk that the bank faces due to unfavorable movements of the market and industry interest rates. The bank may face such unfavorable conditions due to rise in borrowing rates and/or fall in lending rates. The bank’s financing in different sectors is mostly structured at fixed rates for specified terms. Volatility in the money market can also raise the cost of funding of the issuer and thus hamper its profitability. Any change in the government’s monetary policy also might cause unfavorable movement in interest rates. The risks derived from interest rate fluctuation thus may have a significant impact on the bank’s business, profitability and financial condition.

Management’s perception MTB conducts its lending and other business operations by taking appropriate and judicious care of the associated risks. Managing a varied and wide range of risks has always been the primary concern of the bank. In compliance with the requirement of Bangladesh Bank's Asset Liability Management guidelines, MTB has formed "Asset Liability Management Committee" (ALCO) with the senior executives. The Committee meets once every month to set and review strategies on Asset Liability Management (ALM). MTB ALM desk performs Money Market activities, manages liquidity and interest rate risk of the bank, and understands market dynamics i.e. competition, potential target markets etc., updates the balance sheet movements and complies with the statutory obligations as well as the risk elements involved with the business.

2.2 Exchange Rate Risk Exchange rate fluctuation may reduce the profitability of MTB because it funds foreign trade commitments from various sources of foreign exchange like exports, imports and remittances and holds foreign currencies to serve these purposes. If the local currency appreciates against the major foreign currencies and the bank holds a significant net long position in foreign currencies during that time, the bank might incur losses. Similarly, if the local currency depreciates against the major foreign currencies while the bank holds a net short position in foreign currencies, the bank might also incur losses.

Management’s perception MTB’s policy regarding Foreign Exchange, in line with policy given by Bangladesh Bank, has well-defined

internal approval procedures and position limits for each foreign currency transactions, as well as vigorous

accounting and information systems and internal compliance control. In compliance with the requirement of

Bangladesh Bank's Foreign Exchange Risk Management guidelines, Treasury department performs the foreign

exchange dealing in an appropriate manner and manages risks of the organization's overall balance sheet as

well as the capital of the Bank . MTB’s internal audit system reports on foreign exchange risk management

policy on a regular basis to the senior management. To minimize the potential losses due to

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foreign exchange risk the bank emphasizes on i) monitoring dealers’ dealing limit ii) reconciliation of treasury front and back office positions iii) daily reconciliation of NOSTRO accounts iv) matching of open items and many more.

2.3 Non-repayment Risk Non-repayment risk is defined as the potential risk that borrower or counterparty will fail to meet its obligations in accordance with agreed terms. Although MTB sets high standards in repaying all its obligations to the depositors and lenders, it is possible that the bank may fail to repay its obligations arising from the bonds to be issued in extreme cases. In the event of default, the investors might suffer from financial loss.

Management’s perception MTB operates under the tight regulations and close supervision of Bangladesh Bank. Moreover, it is highly unlikely that a reputed organization like Mutual Trust Bank Limited will risk its reputation by setting an instance of default. Furthermore, in case of any event of default or non -repayment, the Trustee would give notice period to the Issuer in protecting the Event of Default and take further steps to ensure the interest of the investors.

2.4 Prepayment, Call or Refunding risk Prepayment, call or refunding risks are the risks associated with the early repayment of the principal amount of a bond. Such risks exist in a bond that has prepayment or call option.

Management’s Perception Since there is no provision for early repayment of the principal amount of the Bonds, the bondholders will not be exposed to prepayment or call risks associated with investing in the Bonds.

2.5 Security Risk Security is the specific revenue sources or assets pledged by an issuer to the bondholder to secure repayment of the bond. Therefore, security risk is all about the process of recovering the investment by the bond holder by utilizing the charge against the collateral securities in case of Issuer’s inability to repay the face value of the bond(s).

Management’s Perception Mutual Trust Bank’s subordinated bond is an unsecured bond. Specific revenue sources or assets are not being pledged against issuance of the bonds. However, investors will have the right on the Bank’s cash flow to get repaid but rank of a subordinated bond holder is below than other loans (or securities) with regard to claims on assets or earnings.

2.6 Liquidity Risk The Bank's businesses are subject to liquidity risks and could affect the Bank's ability to meet its financial obligations. In order for the Bank to continue to meet its funding obligations and to maintain or grow its business generally, it relies on customer savings/deposits as well as ongoing access to the wholesale lending markets. The ability of the Bank to access funding sources on favorable economic terms is dependent on a variety of factors, including a number of factors outside of its control, such as general market conditions and confidence in the banking system.

Management’s Perception The management of Mutual Trust Bank is well aware of the risks involving liquidity constraint and is capable of handling such risks by practicing modern Asset Liability Management (ALM) techniques. The ALM committee regularly monitors the overall liquidity position of the bank and proactively makes policy changes in due course of time. Therefore, it is very unlikely that the bondholders will face any material loss from liquidity risk.

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2.7 Management Risk Management risk refers to the chance that company managers may put their own interests ahead of the interest of the company and shareholders. The term signifies the risk of the situation that may occur if the company or any of its stakeholders other than the management would have been better off without the choices made by management. The bondholders may suffer financial losses in such an event.

Management’s Perception The management of Mutual Trust Bank comprises a group of highly professional individuals with considerable experience and reputation in the country’s financial industry. Therefore, it is very unlikely that the management will conduct in such an unprofessional manner. Moreover, the management of the bank is constantly supervised by a board of directors consisting of seasoned professionals and entrepreneurs who work hard to ensure that the interests of all the stakeholders are served by the management. Being operated in the highly regulated banking industry is also a safeguard against this risk as Bangladesh Bank monitors the management to ensure best practice in the industry.

2.8 Operational Risk The business of the bank depends on the ability to process a large number of transactions efficiently and accurately. Losses may occur from inadequate personnel, inadequate or failed internal control processes and systems, or from external events that interrupt normal business operations. There can be no assurance that the Bank will not suffer material losses from operational risk in the future.

Management’s Perception MTB has restructured Internal Control and Compliance Division (ICC) headed by a senior level executive in light of Core Risk guidelines of Bangladesh Bank. The Division is comprised of three departments; Audit and Inspection Department, ICC Compliance Unit and ICC Monitoring Unit. The Bank has developed an Internal Control and Compliance Policy duly approved by the Board of Directors. As a tool of Internal Control, the Audit and inspection teams undertake periodic and special audit and inspection on the branches and departments/divisions of Head Office in order to sort out the weaknesses and defects in the control process and report to the management for taking corrective measures to protect the interests of the Bank. The Compliance & Monitoring Units of this division ensure timely and proper compliance of all regulatory instructions and internal policies and procedures in the day-today operation of the Bank by way of using various control tools. They assess the operational risk and take appropriate measures to mitigate the same for smooth operation of the Bank. ICC Division reports serious non- compliances detected by internal and external auditors with up-to-date compliance position thereto, large financial risk exposures, control weaknesses etc. to the Audit Committee of the Board for review and taking appropriate measures. The ICC division also ensures the clear definition of organizational structure, appropriate assignment, accountability and delegation of authorities to functional management to create control and compliance culture within organization with the active guidance and supervision of senior management and Board of Directors.

2.9 Business Risk Business risk refers to the possibility that the bank will have lower than anticipated profits, or that it will experience a loss rather than a profit. Business risk of the issuer could occur by numerous factors including interest spread, non-interest income, operating expenses, money & capital market volatility, competition, government regulations and economic climate. Like all other companies Mutual Trust Bank is also exposed to certain business risk factors.

Management’s Perception Like all other businesses such risks exist in the banking industry. The Bank scrutinizes all of its clients and the associated risks systematically using up to date risk evaluation techniques and thereby has been able to maintain good asset quality so far and expects the same in the future. Some other systematic (Market) risks might arise from the external environment of the Bank, similar to any other bank.

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2.10 Industry Risk The issuer is operating in a highly competitive market as modern banking industry has brought greater business diversification. Some banks in the industrialized world are entering into investments, underwriting of securities and portfolio management. The entry of new competitors may also deteriorate the competitive environment and result in lower profitability of the bank.

Management’s Perception Being a robustly growing third generation private commercial bank, MTB has already carved a commendable

position in the banking industry of Bangladesh. The Bank has always been careful in offering its products and

services at competitive terms and conditions which in turn optimizes its industry risk exposure. The

management also continues to focus on more diversification of the loan book. However, like all the other

banks currently operating in Bangladesh, industry risk remains a key risk factor for MTB.

2.11 Market and Technology Related Risk The financial industry of Bangladesh is currently one of the fastest growing in the country and is increasingly becoming competitive. Especially the entrance of nine more banks in the industry in 2012-13 has made the competitive atmosphere more intense. Strong marketing and brand management would be required to increase the bank’s customer base.

As the banking industry is becoming more and more technology dependent the risks deriving from technological use is increasing day by day. The bank might be exposed to risks such as cyber-attack, system collapse, system hacking, unauthorized electronic fund transfers, etc.

Management’s Perception Business entities today exist in a highly competitive world. They are constantly innovating to meet their business objectives providing essential and unique services to their customers. Technology advances have business objectives providing essential and unique services to their customers. Technology advances have enabled them to achieve their varied strategies. And yet, the threats of disaster, on account of business interruption, are not extinct - in fact, they have also evolved along with the technology. Keeping that in mind MTB has taken up its Business Continuity Planning (BCP) as the most significant challenges working out a way to prevent, if possible, and manage the consequences of a disaster, limiting it to the extent that a business can afford. Besides BCP, the Bank is also focusing on combating security threats as well. In keeping with our centralized management model, each branch within the Bank has its own ICT systems. Actions taken include the updating of software and analyzing new software, enhancing ICT related controls, training of staff in system knowledge and sharing of best practices between branch users.

2.12 Risk Related to Potential or Existing Government Regulations The issuer operates its business under the specific guidelines laid by Bangladesh Bank, Bangladesh Securities and Exchange Commission and other regulatory authorities. The bank is also regulated by Bank Companies Act 1991(amended up to 2013), Companies Act 1994, Income Tax Ordinance 1984, Income Tax Rules 1984 and Value Added Tax (VAT) Act 1991. Moreover, Bangladesh Bank changes policy rates including Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR) of banking institutions from time to time. Any abrupt changes in the policies and regulations made by the authorities may adversely affect the business of the company.

Management’s Perception Unless any policy change that may negatively and significantly affect the industry as a whole, the business of the bank is expected not to be affected materially. Like all scheduled banks in Bangladesh, MTB has been funding their assets from their deposits after maintaining required SLR including CRR has the bank has been consistently compliant to any such changes. Mutual Trust Bank is capable of dealing with consequences of unfavorable policy or regulatory changes made by the government. Additionally, the regulatory bodies in Bangladesh are least likely to take any steps that might prove detrimental to the country’s financial industry.

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2.13 Risk Related to Potential Changes in Global or National Policies A financial institution’s ability to operate a profitable business is directly related to the monetary and fiscal policies of the country at any given time. Imposition of restrictive monetary and/or fiscal policy by the government at any time may affect a company’s profitability. Again, changes in the existing global or national policies can have either positive or negative impacts on the bank.

Every company operates under the economic policies formulated and imposed by the political government. The government tends to reshape these policies time to time for the sake of greater interest of the country’s economy. Sometimes those changes in existing policy or any future policy framework adversely affect smooth operation of such companies.

Management’s Perception The management of the bank is always concerned about the prevailing and upcoming future changes in the

global or national policy and shall response appropriately and timely to safeguard its interest. However, it is

possible that MTB suffers from major adverse changes in global and/or national policies in the future.

2.14 Credit Risk Credit risk is the risk due to a borrower’s inability to meet its financial obligations to the lender. The credit risk is generally made up of transaction risk or default risk and portfolio risk. This risk is controlled through segmental exposure limits to various industries and sectors, prudential exposure and substantial exposure ceiling and risk mitigation by obtaining collateral and guarantees.

Management’s Perception Mutual Trust Bank has put in place a well-structured Credit Risk Management policy duly approved by the Board. In addition to Credit Risk Management Policy, the company has also framed board approved credit policy and ensures compliance with regulatory requirements, more particularly in respect of Exposures norms, Assets Classification guidelines, Capital Adequacy guideline, etc. of Bangladesh Bank/other Statutory Authorities.

Credit Risk is monitored by the company account wise and compliance with the risk limits/exposure cap approved by the board is ensured. The quality of internal control system is also monitored and in-house expertise has been built up to tackle all the facets of Credit Risk.

The Bank follows a well-defined multi-layered discretionary power structure for sanction of loans. Credit Grid has been constituted at Plead office level for considering fresh/enhancements proposals. It assesses various risk factors for new products prior to its introduction. Therefore, the Issuer takes various measures for minimizing its credit risk.

2.15 Reputation Risk Money Laundering risk of financial institutions lies with the involvement in any single transact on or series of

transactions that assists a criminal in keeping, concealing or disposing of proceeds derived from illegal

activities. So it is a major threat to the banks and non-bank financial institutions. In place of the Money

Laundering Prevention Act, 2002, the government re-enacted Money Laundering Prevention Ordinance, 2008

(ordinance 12 of 2008) on 13.04.08. The government enacted Anti-Terrorism Ordinance, 2008 on 09.06.2008

in order to combat terrorism and financing of terrorism. These two ordinances entrust some duties and

responsibilities with financial institutions. Bangladesh Bank, the regulatory authority, has issued at least 20

(twenty) circulars so far which includes, among others, KYC procedures, STR, CTR, Money Laundering

Prevention Ordinance 2008, Anti -Terrorism Ordinance, 2008 and their implementation processes. There can

be many other reasons for which an organization can suffer from reputational loss.

Management’s Perception MTB in line with the said ordinances, circulars and guidelines of Bangladesh Bank, has developed two separate guidelines on policies and procedures on prevention of Money Laundering and on Combating Financing of Terrorism. As per the provisions of these two ordinances the employees of the Bank have to carry out some duties and responsibilities under the supervision of Bangladesh Bank. In order to ensure

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the compliance of all the instructions given on different occasions by Bangladesh Bank, Central Compliance Unit (CCU) has been established and Chief Anti-Money Laundering Compliance Officer (CAMLCO) and Branch Ant-Money Laundering Compliance Officers (BAMLCO) have been designated. Additionally, MTB, under the leadership of one of the strongest Board of Directors in the country as well as a professional top management, is continuously working to improve its standards and practices in order to keep pace with global best practices.

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3 Use of Proceeds

3.1 Purpose of Issuance of Mutual Trust Bank 4th Subordinated Bond Mutual Trust Bank has decided to raise capital through issuance of subordinated bonds in order to strengthen its capital base in accordance with Basel III guidelines of Bangladesh Bank. The proposed subordinated bond issue will help the bank enhance its capital strength through raising Tier 2 capital and continue its balance sheet growth.

3.2 Plan Regarding Use of Proceeds from the Subordinated Bonds Apart from strengthening of the bank’s capital base, the proceeds from the issue will be used for undertaking general business activities of the bank including loans and investments in treasury and other securities. In summary, the proceeds will primarily be used for:

Raising Tier-2 capital of the bank Growing the bank’s loan portfolio in corporate, SME and retail segments Investing in treasury securities and other instruments

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4 Features of the Debt Security Mutual Trust Bank 4th Subordinated Bond is a non-convertible, fully redeemable, unsecured subordinated debt instrument with a tenure of 7 years. The claims of the potential holders of the Bonds are junior to the claims of the depositors and other creditors of the Issuer. The bonds are unsecured and will not be insured by any deposit insurance scheme. The bonds are non-convertible and fully redeemable and will be ineligible as collateral for any loan made by the Issuer. The major features1 of the Mutual Trust Bank 4th Subordinated Bond are presented below:

4.1 Basic Features of the Instrument

Table 1: Basic Features of Mutual Trust Bank 4th Subordinated Bond

Name of the Instrument: MTB 4th Subordinated Bond

Issuer: Mutual Trust Bank Limited

Purpose: To raise Tier-2 Capital

Lead Arranger: RSA Advisory Limited

Co-Arranger: MTB Capital Limited

Trustee: EBL Investments Limited

Paying Agent, Register, Transfer EBL Investments Limited

Agent:

Legal Counsel: Amicus Curiae

Credit Rating Agency: Emerging Credit Rating Limited (ECRL)

Issue Size: BDT 5,000,000,000 (Five Billion Taka)

Issue Type: Tier 2 Eligible Subordinated Bond

Tenor: 7 years from the date of issuance

Face Value: BDT 10,000,000 (Ten Million) Per Bond

Minimum Subscription: BDT 10,000,000 (Ten Million Taka)

Total Bonds to be issued: 500 (Five Hundred) no.

Investors: Institutional investors and high net-worth individual investors

Mode of Placement: Private Placement on a best effort basis

Yield to Maturity / Rate of Coupon Rate

Return

Coupon Rate: Reference Rate + Coupon Margin

Latest average 6-month FDR rate of all private commercial banks excluding Islamic banks & foreign banks as published by

Bangladesh Bank on the quotation day.

Reference Rate: The Reference Rate will be rounded to 2 (two) decimal places.

For example, if the benchmark rate is 5.155, then it should be rounded off to 5.16 and if the benchmark rate is 5.154 then it

should be rounded off to 5.15

Quotation Day: 5 Business Days before the first day of any period for which Coupon is to be paid.

Coupon Margin: 2.0%

Range of Coupon Rate: 7.00% to 10.00% at all times

Coupon Payment: Semi-annually starting after 6 months from the drawdown date

1 All the features of MTB 4th Subordinated Bond are draft only and finalization of these features are subject to the approvals of concerned regulators.

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Face Value (principal) redemptions will be in 5 (five) equal

annual tranches commencing at the end of 3rd year from the date

of drawdown in the following manner:

Year Redemption

Repayment Schedule: 3rd Year 20.0%

4th Year 20.0%

5th Year 20.0%

6th Year 20.0%

7th Year 20.0%

Prepayment, Call Refunding, The Bond is non-convertible and not-callable in nature and has Conversion Features: no prepayment option.

Tax Feature: According to the laws of Bangladesh

The Issuer shall pay a late payment penalty of 2% (two per cent) Late Redemption: higher than the Coupon Rate and be payable on the amount not

paid on the due date up till the date of actual payment. Issuer Rating

AA (Long Term), ST-2 (Short Term), Outlook: Stable

Rating Date: 13 May 2019

Credit Rating: Issue Rating

AA-B, Outlook: Stable Rating Date: 03 November 2019

Description of Collateral Security

and Type of Charges to be Unsecured

Created Against the Issue:

Listing: Unlisted

Transferability/Liquidity: Transferable in accordance with the provisions of Trust Deed.

Governing Law: Laws of Bangladesh.

Total costs for issuing the bond (considering BDT 5,000 million Costs Related to the issue: is successfully raised) have been estimated to be BDT 28.10

million.

4.2 Rate of Return, Yield to Maturity, Coupon/Discount Rate Rate of return comprises of reference rate and Margin.

Reference Rate: Latest average 6-month FDR rate of all private commercial banks excluding Islamic banks & foreign banks as published by Bangladesh Bank on the quotation day.

o The Reference Rate will be rounded to 2 (two) decimal places. For example, if the benchmark rate is 5.155, then it should be rounded off to 5.16 and if the benchmark rate is 5.154 then it should be rounded off to 5.15.

Coupon Margin: 2.00% p.a.

Coupon Floor Rate: 7.00%

Coupon Ceiling Rate: 10.00%

Coupon payment: Coupon to be paid semi-annually. First coupon will be paid after six months of the drawdown.

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4.3 Repayment Schedule Face Value (principal) redemptions of every tranche will be in 5 (five) equal annual installments commencing at the end of 3rd year from the issue date of the respective tranche.

Table 2: Repayment Schedule of MTB 4th Subordinated Bond

MTB 4th Subordinated Bond

Repayment Schedule for Total Issue of BDT 5,000 Million

Year No. of

Months Beginning Principal Principal Ending

Tranches

Balance

Redemption (%)

Redemption

Balance

1st

6 5,000,000,000 0.00% - 5,000,000,000

12

5,000,000,000

0.00%

-

5,000,000,000

2nd

18 5,000,000,000 0.00% - 5,000,000,000

24

5,000,000,000

0.00%

-

5,000,000,000

3rd

30 5,000,000,000 0.00% - 5,000,000,000

1

36

5,000,000,000

20.00%

1,000,000,000

4,000,000,000

4th

42 4,000,000,000 0.00% - 4,000,000,000

2

48

4,000,000,000

20.00%

1,000,000,000

3,000,000,000

5th

54 3,000,000,000 0.00% - 3,000,000,000

3

60

3,000,000,000

20.00%

1,000,000,000

2,000,000,000

6th

66 2,000,000,000 0.00% - 2,000,000,000

4

72

2,000,000,000

20.00%

1,000,000,000

1,000,000,000

7th

78 1,000,000,000 0.00% - 1,000,000,000

5

84

1,000,000,000

20.00%

1,000,000,000

-

4.4 Enforcement of Charges over Securities The Trustee may at any time, at its discretion and without further notice, institute such proceedings against the

Issuer as it may think fit to recover any amounts due in respect of the Bonds which are unpaid or to enforce

any of its rights under this Trust Deed or the Conditions but it shall not be bound to take any such

proceedings unless (a) it shall have been so directed by an Extraordinary Resolution or a Written Resolution

and (b) it shall have been indemnified and/or secured to its satisfaction against all liabilities, proceedings,

claims and demands to which it may thereby become liable and all costs, charges and expenses which may be

incurred by it in connection therewith and provided that the Trustee shall not be held liable for the

consequence of taking any such action and may take such action without having regard to the effect of such

action on individual Bondholders. Only the Trustee may enforce the provisions of the Bonds or this Trust

Deed and no Bondholder shall be entitled to proceed directly against the Issuer unless the Trustee, having

become bound so to proceed, fails to do so within a reasonable time and such failure is continuing.

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5 Description of collateral Security Subordinated Bonds are unsecured and rank below deposits, borrowings and secured bonds with regard to

claims on assets or earnings. MTB 4th Subordinated Bond is unsecured and the claims of the bondholders are

not covered by any collateral or security thereon and therefore no charge against the issues.

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http://www.investopedia.com/terms/e/earnings.asp


6 Rights and Obligations of the Issuer

6.1. General Covenants by the Issuer 6.1.1. The Issuer hereby covenants that the Bonds will be issued in registered and

unlisted form.

6.1.2. The Issuer covenants with the Trustee that it will comply with and perform and observe

all the provisions of this Trust Deed and the other Transaction Documents which are

expressed to be binding on it. The terms and conditions of the Bonds shall be

binding on the Issuer, the Bondholders and the Trustee. The Trustee shall be entitled

to enforce the obligations of the Issuer under the Bonds as if the same were set out

and contained in this Trust Deed, which shall be read and construed as one

document with the Bonds. The Trustee shall hold the benefit of this covenant to pay

all sums due and payable but unpaid by the Issuer in respect of payments with

respect to the Bonds upon trust for itself and the Bondholders.

6.1.3. Covenant to comply with Bangladesh Bank Rules and Guidelines, Bangladesh Securities and Exchange Commission Rules and Guidelines, Trust Deed, conditions, Schedules

and Agency Agreement:

(a) The Issuer hereby covenants with the Trustee to comply with, perform and

observe the conditions of all Rules and Guidelines published by the Bangladesh

Bank, Bangladesh Securities and Exchange Commission Rules and Guidelines all

those provisions of this Trust Deed, the Conditions, the Schedules, the Agency

Agreement and the Subscription Agreement which are expressed to be binding

on it and to perform and observe the same. The Bonds are subject to the

provisions contained in this Trust Deed, the Conditions, the Schedules, Agency

Agreement and the Subscription Agreement, all of which shall be binding upon

the Issuer and the Bondholders and all persons claiming through or under them

respectively. The Bondholders and all persons claiming under or through them

respectively will also be entitled to the benefit of, and will be bound by, this

Trust Deed and the other Bond Documents and will be deemed to have notice

of all of the provisions of the Bond Documents.

(b) The Issuer hereby confirms that it has obtained due approval from the

Bangladesh Bank and the Bangladesh Securities and Exchange Commission

for issuance of the Bonds.

6.1.4. As long as any of the Bonds remains outstanding (and, for the avoidance of doubt, a Bond

is outstanding as long as it has not been redeemed in full notwithstanding that it has

become due) or any amount is outstanding to the Trustee or any Bondholder under any

Bond Document, the Issuer undertakes to each of the Trustee and the Bondholders that

it shall comply with the provisions of this Clause 6.1.4

(a) Change of Business The Issuer shall procure that no substantial change is made to the general

nature of the business of the Issuer.

(b) Arms' length transactions The Issuer shall not enter into any transaction, agreement or arrangement

with any of its Affiliates other than on arm’s length basis.

(c) General Undertakings (i) Authorisations

The Issuer shall promptly:

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1. obtain, comply with and do all that is necessary to maintain in full

force and effect; and

2. as and when requested by the Trustee, supply to the Trustee

certified copies of, any Authorisation required under any law or

regulation of its jurisdiction of incorporation to enable it to

perform its obligations under the Bond Documents to which it is a

party (or any of them) and/or to ensure the legality, validity,

enforceability or admissibility in evidence in its jurisdiction of

incorporation of any Bond Document to which it is a party

(ii) Compliance with laws The Issuer shall comply in all respects with all laws to which it

is subject including, without limitation, the requirements and

guidelines of the Bangladesh Bank and Bangladesh Securities

and Exchange Commission rules and Guidelines.

(iii) Insurance The Issuer shall maintain insurances on and in relation to its

business and assets with reputable underwriters or insurance

companies against those risks and to the extent as is usual for

companies carrying on the same or substantially similar business.

(iv) Corporate Governance

(1) The Issuer shall ensure that it remains duly incorporated

and validly existing under the laws of its jurisdiction of

incorporation.

(2) The Issuer shall ensure it shall at all times have the power

and necessary Authorisations to own its assets and carry on

its business as from time to time being conducted.

(3) The Issuer shall maintain and preserve all of its assets,

which may be necessary in the conduct of its business as

conducted from time to time, in good working order and

condition, ordinary wear and tear excepted.

(v) Taxation and claims

The Issuer shall duly and punctually follow the prevailing

rules and regulations of taxation.

(vi) Maintenance of and access to books and records and inspection

The Issuer shall, maintain books and records (with respect to

itself and its business) in the manner described in Clause Error!

R eference source not found. in this MTB 4th Subordinated

Bond Trust (the Trust Deed).

(vii) Further assurance

The Issuer shall promptly do all such acts or execute all such

documents (including assignments, transfers, mortgages, charges,

notices and instructions) as the Trustee may reasonably

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specify (and in such form as the Trustee may reasonably require in

favour of the Trustee or its nominee(s)) for the exercise of any

rights powers and remedies of the Trustee (for and on behalf of

any or all of the Trustee and/or the Bondholders) provided by or

pursuant to the Bond Documents or by law on a best efforts basis

and to the extent permitted by applicable laws.

(d) Loans and Guarantee

The Issuer shall not

(i) be a creditor in respect of any Financial Indebtedness, except for:

(1) any loan in its ordinary course of business consistent with its

current practice; and

(ii) incur or allow to remain outstanding any guarantee in respect of any

obligation (whether actual or contingent) of any person, or otherwise

voluntarily assume any liability, whether actual or contingent, in respect

of any obligation of any person, except for:

(1) any guarantee under any Bond Document;

(2) any guarantee in the ordinary course of business consistent

with its current practice.

(e) Undertakings to Comply with Bangladesh Bank Authorisation and Rules

and Guidelines and Bangladesh Securities & Exchange Commission Rules

and Guidelines

It will at all times comply with the terms of the approval issued by Bangladesh Bank and

BSEC including the Rules; and any other Guidelines issued by the Bangladesh Bank

from time to time (including maintaining any required Bangladesh Bank rating).

(f) Undertaking as to constitution of the Issuer

That the Issuer is a duly incorporated banking company under the relevant

Companies Act of Bangladesh and licensed by Bangladesh Bank to carry out

banking business in Bangladesh and there has been no material adverse

change in its condition since the date of this Deed of Trust and that it is not

in default on any agreement or in violation of its charter or bye laws.

(g) Providing Information

The Issuer shall provide such information and within such period of time

identified in Clause 17.2, 17.3 and Error! Reference source not found. of t he MTB 4th Subordinated Bond Trust to the Bondholders and the Trustee.

6.2. Corporate Covenants by the Issuer

6.2.1. Conduct

The Issuer shall all times carry on and conduct its affairs in a proper and efficient manner in

compliance with any requirement of law from time to time in force in Bangladesh and in

compliance with its and in compliance with its Memorandum and Articles of Association save

where failure to do so would not constitute a Materials Adverse Effect.

6.2.2. Consents

The Issuer shall obtain, comply with the terms of and do all that is necessary:

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(a) to maintain in full force and effect all authorisations, approvals, licences and consents necessary under any Law in connection with its business; and

(b) to enable it lawfully to enter into and perform its obligations under this Trust Deed

6.2.3. Authorised Signatories

The Issuer shall deliver to the Trustee upon execution of this Deed and thereafter upon any

change of the same, a list of Authorised Signatories of the Issuer together with a specimen

signature of each Authorised Signatory.

6.2.4. Registered Office

The Issuer shall maintain its registered office. In case of change of registered office, the

Issuer will notify this to the Trustee.

6.2.5. Financial Statements

The Issuer shall prepare in respect of each financial years, financial statements and provide

the same to the Trustee in such form and manner as described in Clause 17.2 in the MTB

4th Subordinated Bond Trust.

6.2.6. General Negative Covenants

The Issuer shall not until after the final Maturity Date, save to the extent permitted by or

contemplated by Applicable Law or with the prior written consent of the Trustee.

(a) sell, convey, transfer, lease, assign or otherwise dispose of or agree or attempt or

purport to sell, convey, transfer, lease or otherwise dispose of or use, invest or

otherwise deal with any of its properties, assets or undertaking or grant any option

or right to acquire the same which shall reasonably be expected to have a Material

Adverse Effect.

(b) grant, create or permit to exist any encumbrance over (including the grant of

security or trust over or the occurrence of execution or diligence in respect of) its

assets which shall reasonably be expected to have a Material Adverse Effect.

(c) consolidate or merge with any other person;

(d) permit the validity or effectiveness of the Transaction Documents to be impaired

or to be amended, hypothecated, subordinated, terminated or discharged.

6.2.7. Authorisations

The Issuer must

(a) promptly obtain and maintain in full force and effect all governmental and

regulatory consents, licences, material authorisations and approvals required for

the conduct of its business; and (b) do all such things as are necessary to maintain its corporate status, (c) in each case where failure to do so would be reasonably expected to have a Material

Adverse Effect.

6.2.8. Compliance with Transaction Documents

The Issuer shall at all times comply with and perform all its obligations under the

Transaction Documents and the Bonds save where non-compliance would not lead to a

Material Adverse Effect.

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6.2.9. Exercise Rights

The Issuer shall preserve and/or exercise and/or enforce its rights under and pursuant to

the Bonds and the Transaction Documents.

6.2.10. Dealing with Trustee

(a) The Issuer shall upon reasonable notice, during normal business hours allow the

Trustee and any persons appointed by the Trustee access to such books of account

and other business records as relate to the assigned rights or the benefit of the

assigned rights as the Trustee or any such persons may reasonably require.

(b) So far as permitted by applicable law and subject to any binding confidentiality

restrictions, the Issuer shall at all times give to the Trustee such information, opinions,

certificates and other evidence as the trustee and any persons appointed by the Trustee

shall reasonably require (and which it is reasonably practicable to produce) for the

purposes of the discharge of the duties, trusts, powers, authorities and discretions vested

in the Trustee by or pursuant to this Trust Deed or any other Transaction Document.

6.2.11. Execution of Further Documents

The Issuer shall, so far as permitted by applicable law and regulatory requirements,

execute all such further documents and do all such further acted and things as the Trustee

(acting reasonably) may consider to be necessary at the time to give effect to the terms of

the relevant Transaction Documents.

6.2.12. Notification of Event of Default

The Issuer shall deliver notice to the Trustee forthwith upon becoming aware of any

Event of Default without waiting for the Trustee to take any further action.

6.2.13. No Variation and Termination of Transaction Documents

The Issuer shall not until the final Maturity Date, save to the extent permitted by the Transaction Documents or with the prior written consent of the Trustee:

(a) terminate, repudiate, rescind or discharge any Transaction Documents.

(b) vary, novate, amend, modify or waive any provision of any Transaction Document;

(c) permit any person who has obligations under the Transaction Document to be released

from such obligations other than in accordance with the terms of the applicable Transaction Document and any applicable requirement of law or regulatory direction.

6.2.14. Filings

The Issuer shall effect all required filings in respect of the Issuer and file, record or enrol

each Transaction Document required to be filed, recorded or enrolled with any court or

other authority in Bangladesh and ensure that such required filings and such other filings,

recordings or enrolments are at all times maintained in accordance with any applicable

requirement of law or regulatory direction.

6.2.15. Payments

The Issuer shall pay moneys payable by it to the Trustee under this Trust Deed without

set off, counterclaim, deduction or withholding, unless otherwise compelled by law.

6.2.16. Notices to Bondholders

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The Issuer shall send or procure to be sent (not less than three days prior to the date of

publication) to the Trustee, for the Trustee’s approval, one copy of each notice to be given

to the Bondholders in accordance with this Trust Deed and not publish such notice

without such approval and, upon publication, send to the Trustee two copies of such

notice.

6.2.17. Notification of Non-Payment

The Issuer shall use reasonable endeavours to procure that it notifies the Trustee

forthwith in the event that it does not, on or before the due date for payment in respect of

the Bonds of any Series receive unconditionally the full amount in the relevant currency of

the monies payable on such due date;

6.2.18. Notification of Late Payment

The Issuer shall forthwith give notice to the Bondholders through the Trustee of

payments of any sum due in respect of the Bonds, made after their due date to

the Trustee.

6.2.19. Non-Listing of Bonds in the Stock Exchanges

The Bonds will be unlisted and remain unlisted throughout the period of the Bond

and the Issuer shall not consider the possibilities of listing the Bonds in any of the

Stock Exchanges of Bangladesh.

6.2.20. Notification of Tax Deduction

The Issuer shall promptly give notice to the Trustee: (a) if it is required by law to effect a deduction or withholding of Tax in respect

of any payment due in respect of any Bonds.

(b) and in such cases take such action as may be required by the Trustee acting reasonable in respect thereof

6.3. Consolidation, Amalgamation or Merger

The Issuer will not consolidate with, merge or amalgamate into or transfer its assets substantially as

an entirety to any company or convey or transfer its properties and assets substantially as an

entirety to any person (the consummation of any such event, a "Merger"), unless:

6.3.1. the company formed or incorporated by such Merger or the person that acquired such

properties and assets shall expressly assume, by a supplemental trust deed, all obligations of

the Issuer under the Trust Deed and the Bonds and the performance of every covenant

and agreement applicable to it contained therein and to ensure that the holder of each

Bond then outstanding will have the right to the new company.

6.3.2. immediately after giving effect to any such Merger, no Default or Event of Default

shall have occurred or be continuing or would result therefrom; and

6.3.3. the company formed or incorporated by such Merger, or the person that acquired such

properties and assets, shall expressly agree, among other things, to indemnify each holder

of a Bond against any tax, assessment or governmental charge payable by withholding or

deduction thereafter imposed on such holder solely as a consequence of such Merger with

respect to the payment of principal and interest on the Bonds.

6.4. In the event of the passing of an Extraordinary Resolution in accordance with Clause 20 of the

MTB 4th Subordinated Trust Deed (the trust deed), a modification, waiver or authorisation in

26 | P a g e


accordance with Clause 21 of the Trust Deed, the Issuer will procure that the Bondholders

be notified in accordance with Clause 12.9 of the Trust Deed.

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7 Rights, Duties and Obligations of the Trustee 7.1. Duties and Powers of the Trustee

The Trustee has the following duties and powers in connection with the Trust:

7.1.1. to hold the benefit of the covenants made by the Issuer in this Trust Deed and the

Conditions on trust for the Bondholders; 7.1.2. to open such accounts as it deems necessary for discharging the functions of Trustee; 7.1.3. to keep the money and assets representing the Trust Property (including enforcement

proceeds) and to deposit and withdraw such moneys and assets as may be required

from time to time;

7.1.4. to undertake all such actions for the recoveries of any overdue in accordance with the

provisions of this Trust Deed and to execute all such documents, deeds and papers and

to do all acts in relation thereto; 7.1.5. to issue, manage and administer the Bonds in accordance with the terms of this Trust

Deed and execute, acknowledge, confirm or endorse any agreements, documents,

deeds, instruments and papers in connection therewith; 7.1.6. to call any meetings of the Bondholders in accordance with the provisions of the Trust

Deed and the Bonds and to facilitate the proceedings of such meeting as it deems

appropriate in accordance with the terms of this Trust Deed; 7.1.7. to implement, give effect to and facilitate the terms and conditions of the Bonds and

such other documents, deeds and agreements in contemplation thereof; 7.1.8. upon instruction by the Bondholders upon occurrence of an Event of Defaultin

accordance with this Trust Deed, to sell or otherwise dispose of the Trust Property and

close any bank accounts that may have been opened in pursuance of this Trust Deed

after distribution of amounts standing to their credit; 7.1.9. to take such action as may be appropriate for the protection of the interest of the

Bondholders in accordance with the Trust Act, 1882 and the provisions of this Trust

Deed; 7.1.10. The Trustee shall have power to initiate negotiations with the respective parties for

inclusion of any additional terms and conditions for the performance of the obligations

under this Trust Deed for the protection of the interest of the Bondholders, and

necessary amendments can then be made by way of mutual agreement; and 7.1.11. to do all such other acts, deeds and things as may be necessary and incidental to the

above objects unless such acts require the prior consent of the Beneficiaries in

accordance with this Trust Deed. 7.2. Covenant to repay

The Issuer covenants with the Trustee that it will, as and when the Bonds or any of them become due to be redeemed or any principal on the Bonds or any of them becomes due to be repaid in accordance with and subject to the terms and conditions of the Bonds in this Trust Deed or any provision of this Trust Deed, unconditionally pay or procure to be paid to or to the order of the Trustee in Taka in freely transferable funds for value the relevant due date for payment the principal amount of the Bonds or any of them becoming due for redemption or repayment on that date and shall (subject to any terms and conditions of the Bonds) until all such payments (both before and after judgment or other order) are duly made unconditionally pay or procure to be paid to or to the order of the Trustee as aforesaid on the dates provided for in the Trust Deed, or any of them outstanding from time to time as set out in the Trust Deed provided that:

7.2.1. every payment in respect of the Bonds or any of them made to or through the Paying

Agent in the manner provided in the Agency Agreement shall satisfy, to the extent of

such payment, the relevant covenant by the Issuer contained in this Clause except to the

extent that there is default in the subsequent payment thereof to the Bondholders in

accordance with the Trust Deed;

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7.2.2. if any payment in respect of the Bonds or any of them is made after the due date,

payment shall be deemed not to have been made until either the full amount is paid to

the Bondholders or, if earlier, the third Business Day after notice by the Trustee to the

Bondholders in accordance with the Trust Deed that the full amount has been received

by the Paying Agent or the Trustee in the case of payment to the Paying Agent, to the

extent that there is failure in the subsequent payment to the Bondholders under the

Trust Deed; and 7.2.3. in any case where payment due in respect of any Bond is improperly withheld or refused

upon due presentation of a Bond Certificate, payment shall accrue in accordance with

Clause Error! Reference source not found. of the Trust Deed on the whole or such

part o f such amount from the date of such withholding or refusal until the date either

on which such amount due is paid to the Bondholders or, if earlier, the third Business

Day after which notice by the Trustee is given to the Bondholders in accordance with

this Trust Deed that the full amount payable in respect of the said principal amount is

available for collection by the Bondholders provided that on further due presentation

thereof such payment is in fact made.

The Trustee will hold the benefit of this covenant and the covenants in Clause 14 of the Trust Deed (Rights, Duties and Obligations of the Trustee) on trust for the Bondholders.

7.3. Terms of Appointment

7.3.1. Reliance on information (a) Advice: The Trustee may in relation to this Trust Deed act on the opinion or advice

of or a certificate or any information obtained from any lawyer, banker, valuer,

surveyor, broker, auctioneer, accountant or other expert and shall not be

responsible for any Liability occasioned by so acting;

(b) Certificate of directors or Authorised Signatories: The Trustee, in the exercise of its

functions, may call for and shall be at liberty to accept a certificate signed by two

Authorised Signatories of the Issuer or other person duly authorised on their

behalf as to any fact or matter prima facie within the knowledge of the Issuer, as the

case may be, as sufficient evidence thereof and a like certificate to the effect that

any particular dealing, transaction or step or thing is, in the opinion of the person

so certifying, expedient as sufficient evidence that it is expedient and the Trustee

shall not be bound in any such case to call for further evidence or be responsible

for any Liability that may be occasioned by its failing so to do;

(c) Resolution or direction of Bondholders: The Trustee shall not be responsible for acting in

good faith upon any resolution purporting to be a Written Resolution or to have

been passed at any meeting of the Bondholders in respect whereof minutes have

been made and signed or a direction of a specified percentage of Bondholders,

even though it may subsequently be found that there was some defect in the

constitution of the meeting or the passing of the resolution or the making of the

directions or that for any reason the resolution purporting to be a Written

Resolution or to have been passed at any Meeting or the making of the directions

was not valid or binding upon the Bondholders;

(d) Bondholders as a class: In connection with the exercise by it of any of its trusts, powers,

authorities and discretions (including without limitation any modification, waiver,

authorisation or determination), the Trustee shall have regard to the general interests

of the Bondholders as a class (but shall not have regard to any interests arising from

circumstances particular to individual Bondholders whatever their number and in

particular, but without limitation, shall not have regard to the consequences of the

exercise of its trusts, powers, authorities and discretions for individual Bondholders

29 | P a g e


(whatever their number) resulting from their being for any purpose domiciled or

resident in, or otherwise connected with, or subject to the jurisdiction of, any

particular territory or any political sub-division thereof and the Trustee shall not be

entitled to require, nor shall any Bondholder be entitled to claim, from the Issuer,

the Trustee or any other person any indemnification or payment in respect of any

tax consequences of any such exercise upon individual Bondholders;

(e) No obligation to monitor: The Trustee shall not be under any obligation to monitor or

supervise the functions of any other person under the Bonds or any other agreement

or document relating to the transactions herein or therein contemplated and shall be

entitled, in the absence of actual knowledge of a breach of obligation, to assume that

each such person is properly performing and complying with its obligations;

(f) Bonds held by the Issuer: In the absence of actual knowledge or express notice to the

contrary, the Trustee may assume without enquiry (other than requesting a

certificate of the Issuer), that no Bonds are for the time being held by or for the

benefit of the Issuer or any of its Affiliates;

(g) Events of Default: The Trustee shall not be bound to give notice to any person of the

execution of this Trust Deed or to take any steps to ascertain whether any Default

or Event of Default has happened and, until it shall have actual knowledge or

express notice to the contrary, the Trustee shall be entitled to assume that no such

Default or Event of Default has happened and that the Issuer is observing and

performing all the obligations on its part contained in the Bonds and the Bond

Documents and no event has happened as a consequence of which any of the

Bonds may become repayable;

(h) Right to deduct or withhold for taxes: Deduction or withholding of tax will be as per

prevailing laws of Bangladesh.

(i) No responsibility to investigate: The Trustee shall not have any responsibility for or

have any duty to investigate except under any applicable laws or regulations:

the execution, delivery, legality, validity, effectiveness, adequacy, genuineness, enforceability or admissibility in evidence of any Bond Document;

any recitals, statements, warranties, representations or covenants of any party to any Bond Document;

its ability to exercise the rights, trusts, powers, authorities or discretions purported to be conferred on it by any of the Bond Documents; or

the capacities, powers or credit standing of the Issuer or other party to any of the Bond Documents;

(j) Error of judgment: The Trustee shall not be liable for any error of judgment made in

good faith by any officer or employee of the Trustee assigned by the Trustee to

administer its corporate trust matters;

(k) No responsibility for loss: The Trustee shall not in any circumstances, except under

any applicable laws or regulations:

be liable to account to any Bondholder or any other person for anything except sums actually received by the Trustee which have not been distributed or paid to the persons entitled or at the time of payment believed by the Trustee to be entitled thereto, or

30 | P a g e


be liable to any Bondholder or any other person for any costs, charges, losses, damages, liabilities or expenses arising from or connected with any act, default, omission or misconduct of the Trustee, any Appointee or their respective officers, employees or agents in relation to the Bond Documents except to the extent that they shall have been finally judicially determined to have been caused by the Trustee's own gross negligence, wilful default or fraud.

(l) Force Majeure: The Trustee shall not be liable for any failure or delay in the

performance of its obligations under this Trust Deed or any other Bond

Document because of circumstances beyond such Trustee's control, including,

without limitation, acts of God, flood, war (whether declared or undeclared),

terrorism, fire, riot, embargo, labour disputes, any laws, ordinances, regulations or

the like which restrict or prohibit the performance of the obligations contemplated

by this Trust Deed or any other Bond Document, and other causes beyond such

Trustee's control whether or not of the same class or kind as specifically named

above. However, the Trustee shall use commercially reasonable efforts consistent

with accepted practice in its industry to resume performance as soon as practicable

under the circumstances.

(m) Applicable Law: Notwithstanding anything contained in this Trust Deed the Trustee shall have

all such rights and powers granted to it under the applicable law including but is not limited to

The Securities and Exchange Commission (Private Placement of Debt Securities) Rules 2012.

(n) Immunities: The Trustee's immunities and protections from liability and its right to

indemnification in connection with the performance of its duties under this Trust

Deed shall extend to the Trustee's officers, directors and employees. Such immunities

and protections and right to indemnification, together with the Trustee's right to

compensation, shall survive the Trustee's resignation or removal, the defeasance or

discharge of this Trust Deed and final payment of the Bonds but in any event will be

subject to any gross negligence, wilful default or fraud of which the Trustee or its

officers, directors or employees may be guilty in relation to their duties under this

Trust Deed. The Issuer acknowledges that in any proceedings taken in relation to this

Trust Deed, it will not be entitled to claim for itself or any of its assets immunity from

suit, execution, attachment or other legal process.

7.4. Trustee's Determination and Discretion 7.4.1. Trustee's determination: The Trustee may determine whether or not a default in the

performance or observance by the Issuer of any obligation under the provisions of any

Bond Document or contained in the Bonds is capable of remedy and/or materially

prejudicial to the interests of the Bondholders and if the Trustee certifies that any such

default is, in its opinion, not capable of remedy and/or materially prejudicial to the

interests of the Bondholders, such certificate shall be conclusive and binding upon the

Issuer and the Bondholders provided however that the Trustee may not exercise any powers

conferred upon it by this Clause 7.4.1unless the Trustee having given not less than 10

Business Days' notice of such proposed determination to the Bondholders in accordance

with the Trust Deed, it has not, within 30 days of such notice being received by the

Bondholders or a shorter period as may be agreed by the Bondholders in writing, been

directed by an Extraordinary Resolution or Written Resolution instructing the Trustee as

to the determination which shall be made;

7.4.2. Determination of questions: the Trustee as between itself and the Bondholders shall have full

power to determine all the questions and doubts arising in relation to any of the provisions

of this Trust Deed which in the opinion of the Trustee relates to matters and are bond

specific matters (“Bond Specific Matters”) and every such determination, whether made

31 | P a g e


upon a question actually raised or implied in the acts or proceedings of the Trustee, shall

be conclusive and shall bind the Trustee and the Bondholders provided however that the

Trustee may not exercise any powers conferred upon it by this Clause unless the Trustee

having given not less than 10 Business Days' notice of such proposed determination to

the Bondholders in accordance with the Trust Deed, it has not, within 30 days of such

notice being received by the Bondholders or a shorter period as may be agreed by the

Bondholders in writing, been directed by an Extraordinary Resolution or Written

Resolution instructing the Trustee as to the determination which shall be made;

7.4.3. Trustee's discretion: the Trustee shall (save as expressly otherwise provided herein) as

regards all the trusts, powers, authorities and discretions vested in it by this Trust Deed

or by operation of law, have absolute discretion as to the exercise or non-exercise

thereof and the Trustee shall not be responsible for any Liability that may result from

the exercise or non-exercise thereof but whenever the Trustee is under the provisions of

this Trust Deed bound to act at the request or direction of the Bondholders, the Trustee

shall nevertheless not be so bound unless first indemnified and/or provided with

security to its satisfaction against all actions, proceedings, claims and demands to which

it may render itself liable and all costs, charges, damages, expenses and liabilities which it

may incur by so doing provided however that the Trustee may not exercise any discretion

conferred upon it by this Clause unless the Trustee having given not less than 10

Business Days' notice of such exercise of discretion to the Bondholders in accordance

with the Trust Deed, it has not, within 30 days of such notice being received by the

Bondholders or a shorter period as may be agreed by the Bondholders in writing, been

directed by an Extraordinary Resolution or Written Resolution instructing the Trustee as

to how such discretion shall be exercised;

7.4.4. Trustee's consent: any consent given by the Trustee for the purposes of this Trust Deed may be

given on such terms and subject to such conditions (if any) as the Trustee may require;

7.4.5. Application of proceeds: the Trustee shall not be responsible for the receipt or application by

the Issuer of the proceeds of the issue of the Bonds or the delivery of any Bond

Certificate to the persons entitled to it;

7.4.6. Delegation: the Trustee may, with the prior consent in writing of the Issuer, in the

execution and exercise of all or any of the trusts, powers, authorities and discretions

vested in it by this Trust Deed, act by responsible officers or a responsible officer for the

time being of the Trustee and the Trustee may also whenever it thinks fit, whether by

power of attorney or otherwise, delegate to any person or persons or fluctuating body of

persons (whether being a joint trustee of this Trust Deed or not) all or any of the trusts,

powers, authorities and discretions vested in it by this Trust Deed and any such

delegation may be made upon such terms and conditions and subject to such regulations

(including power to sub-delegate with the consent of the Trustee) as the Trustee may

think fit in the interests of the Bondholders and, provided the Trustee shall have

exercised reasonable care in the selection of any such Appointee and the Trustee shall

not be bound to supervise the proceedings or acts of and shall not in any way or to any

extent be responsible for any Liabilities incurred by reason of the misconduct, omission

or default on the part of such delegate or sub-delegate;

7.4.7. Agents: Subject to the provisions of the Trust Act 1882, the Trustee may, in the conduct of

the trusts of this Trust Deed, with the prior consent in writing of the Issuer, instead of acting

personally, employ and pay an agent on any terms, whether or not a lawyer or other

professional person, to transact or conduct, or concur in transacting or conducting, any

business and to do or concur in doing all acts required to be done by the Trustee, as the case

may (including the receipt and payment of money) and, provided that the Trustee shall

32 | P a g e


have exercised reasonable care in the selection and appointment of any such agent(s), the

Trustee shall not be responsible for any Liabilities incurred by reason of the misconduct,

omission or default on the part of any person appointed by it hereunder or be bound to

supervise the proceedings or acts of any such person;

7.4.8. Custodians and nominees: the Trustee may appoint and pay any person to act as a custodian or

nominee on any terms in relation to such assets of the trust as the Trustee may determine,

including for the purpose of depositing with a custodian this Trust Deed or any document

relating to the trust created hereunder and, provided the Trustee shall have exercised

reasonable care in the selection of any such Appointee, the Trustee shall not be responsible

for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the

misconduct, omission or default on the part of any person appointed by it hereunder or be

bound to supervise the proceedings or acts of any such person; and

7.4.9. Confidential information: the Trustee shall not (unless required by law or ordered so to do

by a court of competent jurisdiction) be required to disclose to any Bondholder any

confidential information (financial or otherwise) made available to the Trustee by the

Issuer or any other person in connection with this Trust Deed and no Bondholder shall

be entitled to take any action to obtain from the Trustee any such information. The

Trustee shall forward to the Bondholders any non-confidential information made

available to the Trustee by the Issuer in connection with this Trust Deed.

7.5. Financial matters 7.5.1. Professional charges: any trustee being a banker, lawyer, broker or other person engaged in

any profession or business shall be entitled to charge and be paid all usual professional

and other charges for business transacted and acts done by him or his partner or firm on

matters arising in connection with the trusts of this Trust Deed and also his incurred

charges in addition to disbursements for all other work and business done and all time

spent by him or his partner or firm on matters arising in connection with this Trust

Deed, including matters which might or should have been attended to in person by a

trustee not being a banker, lawyer, broker or other professional person;

7.5.2. Expenditure by the Trustee: nothing contained in this Trust Deed shall require the Trustee to

expend or risk its own funds or otherwise incur any financial liability in the performance of

its duties or the exercise of any right, power, authority or discretion hereunder if it has

grounds for believing the repayment (if approved by the Issuer) of such funds or adequate

indemnity against, or security for, such risk or liability is not assured to it; and

7.5.3. Restriction on financial transactions with the Issuer:

The Trustee and its directors and officers shall be precluded from making any contracts or entering into any transactions (“Other Business) with the Issuer which would place its fiduciary duties towards the Bondholders in conflict with its rights and obligations in such Other Business.

7.6. Trustee liable for gross negligence

None of the provisions of this Trust Deed shall in any case in which the Trustee has failed to show the degree of care and diligence required by it as trustee, having regard to the provisions of this Trust Deed conferring on the Trustee any powers, authorities or discretions, relieve or indemnify the Trustee against any liability which by virtue of any rule of law would otherwise attach to it in respect of any gross negligence, wilful default or fraud of which it may be guilty in relation to its duties under this Trust Deed.

7.7. Exercise of Discretion

7.7.1. Notwithstanding anything in this Trust Deed to the contrary, the Trustee shall not be

obliged to exercise or consider exercising any discretion or consider making or make any

33 | P a g e


determination (including, without limitation, any determination as to whether any fact or

circumstance or activity or thing is material or substantial or complies with some such

similar quantitative standard) or to consider taking or take any action whatsoever in

connection with or under or pursuant to the Bonds unless directed to do so by the

holders of not less than 662/3 percent in principal amount of the Bonds then outstanding

or if so directed by an Extraordinary Resolution.

7.7.2. The Trustee will not be responsible for any loss, expense, damage, claim, cost, charge or

liability which may be suffered as a result of any exercise or non-exercise of a discretion

or the making or failure to make any determination or the taking or failure to take any

action by the Trustee, acting on the directions of the Bondholders as aforesaid or

pending the provision of such a direction.

7.7.3. A certificate delivered in compliance with this Trust Deed of two Authorised Signatories of

the Issuer or other person duly authorised on their behalf as to the compliance by the Issuer

with any of their respective obligations contained in the Conditions or this Trust Deed shall

be conclusive and binding on the Issuer, the Trustee and the Bondholders save in the case of

manifest error, but without prejudice to the provisions of Clause 7.7.4 below.

7.7.4. The Trustee shall have no responsibility for requesting such certificates unless the Issuer

has failed to deliver such certificates in accordance with Clause 9 of the Trust Deed

(Terms of Appointment) or the Trustee is requested to do so by any Bondholder. The

Trustee shall be entitled to rely on such certificates absolutely and shall not be obliged to

enquire further as regards the circumstances then existing and whether they justify the

provision and the content of such certificate and will not be responsible for any loss

occasioned by so acting. The Trustee shall be entitled to rely on any such certificates as

sufficient evidence by the Issuer of such compliance (or non-compliance) and will not be

responsible for or for investigating any matter relating to the financial condition of or

any other matter relating to the Issuer.

7.8. Events of Default

The Events of Default for the purposes of the Bonds and the Trustee’s rights, duties and

obligations following such an Event of Default shall be as provided for in Clause Error! R

eference source not found. of the Trust Deed.

7.9. Modification and Waiver

The Trustee may agree, without the consent of the Bondholders, to (i) any modification

(except as mentioned in Clause 21 of the Trust Deed) to, or the waiver or authorisation of

any breach or proposed breach of, any terms of the Trust Deed which is not, in the opinion

of the Trustee, materially prejudicial to the interests of the Bondholders or (ii) any

modification to the Bonds or the Trust Deed which, in the Trustee's opinion, is of a formal,

minor or technical nature or to correct a manifest error or to comply with mandatory

provisions of law. All amendments or supplements or modifications to the terms of this

Trust Deed or any of the other transaction documents can be made only in writing signed by

the Issuer and the Trustee. Any such modification, waiver or authorisation will be binding on

the Bondholders and, unless the Trustee agrees otherwise, any such modifications will be

notified by the Trustee to the Bondholders as soon as practicable thereafter.

7.10. Interests of Bondholders

In connection with the exercise of its functions (including but not limited to those in relation

to any proposed modification, authorization, waiver or substitution) the Trustee shall have

34 | P a g e


regard to the interests of the Bondholders as a class and shall not have regard to the

consequences of such exercise for individual Bondholders and the Trustee shall not be

entitled to require, nor shall any Bondholder be entitled to claim, from the Issuer or the

Trustee, any indemnification or payment in respect of any tax consequences of any such

exercise upon individual Bondholders except to the extent provided for in Clause Error!

Reference source n ot found. of the Trust Deed (Taxation) and/or any undertakings given

in addition thereto or in substitution therefore pursuant to the Trust Deed.

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8 Rights and Obligations of the Eligible Investors

8.1 Each investor (Bondholder) shall enter into a separate Subscription Agreement with the Issuer

and shall be bound by the terms and conditions contained in such Subscription Agreement

containing in details the rights and obligations of the investors, and which shall be an integral

part of this Trust Deed.

8.2 The obligations of the Bondholders under the Subscription Agreement and other agreements

with identical terms are several and the failure by Bondholder(s) to perform its obligations

under the Bond Documents shall not affect the obligations of the Issuer towards any other

Bondholder(s) under other identical agreements nor shall any other Bondholder(s) be liable

for the failure by such Bondholder(s) to perform its obligations under the Subscription

Agreement or any other Bond Document.

8.3 The rights of the Bondholder are several and any debt or other obligation arising under the

Subscription Agreement at any time from the Issuer to any other Bondholder(s) shall be a

separate and independent debt. Each Bondholder will be entitled to protect and enforce its

individual rights independently of any other Bondholder and it shall not be necessary for any

other Bondholder(s) to be joined as an additional party in proceedings for such purpose.

8.4 The Bondholders shall hold meetings with such power and scope and in the manner provided

for in Clause 20 in the Trust Deed.

8.5 Undertaking to Issue

The Issuer will, subject to and in accordance with the provisions of the Subscription Agreement, on the Closing Date, duly execute and deliver to the Bondholder a Bond Certificate attached with the Conditions, representing the allocation amount of Bonds subscribed.

8.6 Undertaking to Subscribe

The Bondholders will, subject to and in accordance with the provisions of the Subscription Agreement, on the Closing Date, subscribe and pay the aggregate purchase price for the allocation, in Bangladesh Taka for same day value to such account as the Issuer designates.

8.7 Investor Representations

The Bondholder(s) will comply with all applicable laws and regulations of Bangladesh and each other jurisdiction in which it offers, sells or delivers Bonds or has in its possession or distributes any offering material, in all cases at its own expense.

8.8 Indemnity

The Issuer shall fully indemnify the Bondholder(s) from and against any expense, loss, damage or liability which any of them may incur as per provisions of this trust deed in connection with the enforcement, protection or preservation of any right or claim of the Bondholders under the Transaction Documents.

8.9 Closing

8.9.1 Subscription and Closing

(a) Subject to the conditions precedent contained in the Subscription Agreement, the closing of the issue of the Bonds shall take place on the Closing Date.

(b) Investor Representation Letter: On the date indicated in the Subscription Agreement, the

Bondholders will execute and deliver a letter addressed to the Issuer in the form attached as Schedule 4 (Form of Investor Representation Letter) of the Subscription Agreement.

36 | P a g e


(c) Payment of net issue proceeds: On each Closing Date, of the Bondholders shall pay the purchase price of Bonds to the Issuer in Bangladesh Taka in the manner provided for in the Subscription Agreement.

(d) Bond Certificates:

(i) Registration: On each Closing Date, the Issuer shall procure that the principal

amount of Bonds subscribed for by the Bondholders for which payment has been received in accordance with the Subscription Agreement and are registered in name of the Bondholders (with a notation on the Register and on each Bond Certificate identifying the Issue Date of such Bond Certificate).

(ii) (Issue: On the Closing Date, the Issuer shall duly execute and deliver the Bond

Certificates to the Trustee for authentication. Promptly following the Closing Date, the Issuer will deliver to each Bondholder Bond Certificates, duly authenticated by the Trustee and representing such Investor's entire holding of Bonds.

8.10 Termination

The Bondholders may give a termination notice to the Issuer at any time on or prior to the Closing Date if:

8.10.1 Breach of obligation: the Issuer fails to perform any of its obligations under the

Subscription Agreement;

8.10.2 Failure of condition precedent: any of the conditions precedent is not satisfied or waived by

the Bondholders on the Closing Date; or

8.10.3 Force majeure: since the date of the Subscription Agreement there has been (i) any material

outbreak or escalation of hostilities involving Bangladesh or declaration by Bangladesh of a

national emergency or war or other calamity or crisis or (ii) a material adverse change in

economic, political or financial conditions or currency exchange rates or exchange controls

in Bangladesh or international market, of such magnitude and severity in its effect on the

financial markets as to make it impracticable or inadvisable to proceed with the offer, sale,

distribution or delivery of the Bonds.

8.11 Consequences

Upon the giving of a termination notice under Clause 16.10 of the trust deed (Termination) and subject to the Subscription Agreement:

8.11.1 Discharge of Issuer: the Issuer shall be discharged from performance of its obligations under the

Subscription Agreement except for the liability of the Issuer in relation to expenses related to

the Bonds and except for any liability arising before or in relation to such termination; and

8.11.2 Discharge of Bondholder: such Bondholder shall be discharged from performance of their

respective obligations under the Subscription Agreement.

8.12 Interests of the Bondholders

The interests of the Bondholders shall be protected and preserved by the Trustee in the manner described in Clause 14.10 in the Trust Deed.

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9 Description of Mutual Trust Bank Limited Mutual Trust Bank Limited was incorporated as a Public Limited Company on September 29, 1999, under the Companies Act 1994, with an Authorized Share Capital of BDT 1,000,000,000 divided into 10,000,000 ordinary shares of BDT 100 each. At present, the Authorized Share Capital of the company is BDT 10,000,000,000 divided into 1,000,000,000 ordinary shares of BDT 10 each.

The Company was also issued Certificate for Commencement of Business on the same day and was granted license on October 05, 1999 by Bangladesh Bank under the Banking Companies Act 1991 and started its banking operation on October 24, 1999.

Table 3: Basic Information of the Issuer

Registered name of the company Mutual Trust Bank Limited

Company Registration No. c38707 (665)/99 on September 29, 1999

Bangladesh Bank Permission No. BRPD (P) 744(78)/99-3081 on October 5, 1999

SWIFT Code MTBL BD DH

The Institute of Bankers Bangladesh (IBB)

Bangladesh Association of Banks (BAB)

Bangladesh Foreign Exchange Dealers

Association(BAFEDA)

Bangladesh Institute of Bank Management (BIBM)

Bangladesh Association of Publicly Listed Companies (BAPLC)

Memberships Metropolitan Chamber of Commerce and Industry,

Dhaka (MCCI)

International Chamber of Commerce Bangladesh

Limited (ICCB)

Dhaka Stock Exchange (DSE)

Dhaka Chamber of Commerce & Industry (DCCI)

American Chamber of Commerce in Bangladesh (AmCham)

Primary Dealers Bangladesh Limited (PDBL)

Received the DHL-Daily Star Award as “The Best Financial Institution” of 2014

MTB received Best SME Bank of the Year 2014 &

Best Women Entrepreneurs’ Friendly Bank of the

Year 2014

Won the Golden Globe Tigers Summit Award 2015

for Excellence in Branding & Marketing

Awards The Institute of Chartered Accountants of Bangladesh (ICAB) National Award for best

presented Annual Reports-2015 & 17

MTB won the “Dream Company to Work for”

award in the organizational category at “Asia’s Best

Employer Brand Awards 2018”

MTB won Award for Excellence in Improving

Performance Through Leadership 2018

Over the past 20 years of operation, the Issuer has laid a strong foundation to create a string brand image and

strengthen its foothold in the highly regulated banking industry. MTB is equipped with strong delivery

channels consisting of 114 branches (including 14 SME/Agri branches), 268 ATM booths located in prime

commercial, urban and rural areas of the country, 11 (eleven) MTB Smart Banking Kiosks and 3,140 Point of

Sales (PSO) machines. The Issuer offers fully integrated real-time Online Banking Services, a 24/7 modern

Contact Centre and Internet and SMS banking to its growing customer base, through a dedicated

38 | P a g e


team of experienced Relationship Managers and Alternative Delivery Channels (ADC). Currently there are 2,120 number of employees working for the Bank.

9.1 Subsidiaries of Mutual Trust Bank Limited The Bank has 3 (three) subsidiary companies namely MTB Securities Limited, MTB Capital Limited and MTB Exchange (UK) Limited.

9.1.1 MTB Securities Limited MTB Securities Limited (MTBSL) was incorporated in Bangladesh as a private limited company on March 01, 2010. Vide its registration number no. 82868/10 under the companies Act 1994. The company has started commercial operation on September 23, 2010 after getting approval from the Bangladesh Securities and Exchange Commission (BSEC) as a separate entity. The Main objective of the company is to act as a member of the stock exchange and of the Central Depository System (CDS) companies, and carry on business of brokers, jobbers, or dealers in stocks, securities, bonds, divestures etc. The Company is also authorized to buy, sell, hold and otherwise acquire or invest the capital of the company in shares, stocks, and fixed income securities.

9.1.2 MTB Capital Limited The Issuer obtained permission to embark upon Merchant Banking from the Bangladesh Securities and Exchange Commission (SEC) vide its certificate No. MB-55/2010 dated December 06, 2010 under the Securities and Exchange Commission Act, 1993. The operation has started as on April 17, 2011. MTB Capital Limited (MTBCL) offers the following services to the market:

• Discretionary and Non-Discretionary Portfolio Management Services to both the retail and institutional investors under different product lines.

• Issue management services to medium and large corporate houses to manage their Initial Public Offering (IPO), secondary offering, debt issuance and right issuance.

• Underwriting services for both debt and equity issues. Besides, MTBCL develops various investment schemes suiting varying objectives and constraints of different investor classes.

9.1.3 MTB Exchange (UK) Limited MTB Exchange (UK) Limited (MTB UK) was incorporated on June 14, 2010 under the Companies Act 2006 of UK with registration number 7282261 as a private company limited by shares. The registered office of MTB UK is located at 25 White Chapel Road, London. The main objective of the exchange house is to carry on the remittance business and to undertake and participate in transactions, activities and operations commonly carried out or undertaken by remittance and exchange houses.

9.2 Capital Structure (Consolidated basis) Mutual Trust Bank Limited, the issuer of the subordinated bonds, is a commercial bank and like other banks, its capital structure comprises shareholder’s equity, deposits and other liabilities. Most of MTB’s assets (73.5%) have been financed by deposits and other accounts.

Table 4: Sources of Issuer's Fund As of 30 September, 2019

BDT Million

Liabilities 234,169

Borrowings from other banks, FIs and agents 23,935

Mutual Trust Bank Subordinated Bond 7,400

Deposits and other accounts 183,345

Other liabilities 19,488

Total Equity 15,259

Paid-up capital 6,699

Statutory reserve 4,475

Other reserve (general + Revaluation) 1,190

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Retained earnings 2,368

Minority interest 0.13

Total Liabilities and Shareholders' Equity 249,429

The Issuer maintains appropriate capital adequacy, which enables it to confront various risk factors it may be exposed to. The current CRAR of 12.40% on September 30, 2019 was higher than the minimum requirement of 10% (excluding 2.5% buffer), due to the increase in minimum requirement in accordance with BASEL III implementation roadmap by Bangladesh Bank. The proposed subordinated bond will help meet this requirement. The total eligible capital of the bank, on consolidated basis, was BDT 22,828 million as on September 30, 2019 against the risk weighted assets of BDT 184,147 million.

Table 5: Regulatory Capital of the Issuer

As of Sept 30, 2019

BDT Million

Total Risk Weighted Assets 184,147

Core capital ( Tier- I) 13,064

Supplementary capital ( Tier-II) 10,024

Total Capital 22,828

Total Required Capital 18,415

Capital Surplus/(Shortfall) 4,413

Capital Adequacy Ratio 12.40%

Core capital to Risk Weighted Assets 7.09%

Supplementary capital to Risk Weighted Assets 5.30%

Issuer’s total paid up capital stood at BDT 6,699.3 million at the end of September 30, 2019 which was

divided into 669,929,444 number of ordinary shares with a face value of BDT 10 per share. Out of the

total shares, 41.09% (275,271,441 number of shares) were held by Sponsors of the Issuer.

Table 6: Shareholding Structure of the Issuer

Particulars

As on September 30, 2019

No. of Shares

Share Value(BDT mn)

% of Holding

Sponsors 275,271,441 2,752,714,410 41.09%

Institutions 149,327,513 1,493,275,130 22.29%

General Public 245,330,490 2,453,304,900 36.62%

Total 669,929,444 6,699,294,440 100.00%

9.3 Business Description All types of commercial banking services are provided by the Bank within the stipulations laid down by the Bank Companies Act, 1991 (as amended in 2013) and directive as received from the Bangladesh Bank from time to time. Registered office of the Bank is at MTB Centre, 26 Gulshan Avenue, Gulshan 1, Dhaka 1212. The Bank started its commercial business from October 24, 1999. The principal activities of the bank are to provide all kinds of commercial banking and related services such as accepting deposits, lending loans to customers, trade and services, treasury functions, cash management, securities and custody services, remittance services etc. The Bank obtained the Off-shore Banking Unit Permission vide Letter No. BRPD (P-3)744(105)/2009- 4470 dated December 03, 2009. The Bank commenced operation of this unit from December 07, 2009. The Off-shore Banking Unit is governed under the rules and guidelines of Bangladesh Bank. The principal activities of the Unit are to provide all kinds of commercial banking services to its customers in foreign currencies approved by the Bangladesh Bank.

9.3.1 Products & Services

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9.3.1.1 Wholesale Banking MTB Wholesale Banking services are a blend of the Corporate, Off-Shore Banking, and Syndication &

Structured Finance, that focuses on offering a wide range of services to large corporates, multinationals and

institutional clients. The bank puts highest priority to assist its customers fund requirements with diversified

financial products and services. The bank always focuses on delivering services by creating exceptional value to

its customers while offering market competitive relationship loan pricing and conditions. Wholesale banking products includes;

Term Finance: MTB provides loans that have specified repayment schedule and a floating interest

rate with tenure more than one year but less than ten years. It offers term loans for the following

broader purposes.

Project Finance Finance for Importing Capital Machinery Lease Finance House Building Finance

Working Capital Finance: To meet customers' running capital requirements MTB offers the

following products:

Secured Over Draft (SOD) Cash Credit (Hypo.) Cash Against Document Short Term Loan Inland Bill Purchase (IBP) Foreign Bill Purchase (FBP)

Trade Finance: MTB offers export and import finance facilities for its customers depending on

their requirements. MTB’s trade finance service is a unity of funded and non-funded facilities:

Export Finance Facility includes; o Back to Back L/C Opening o Export Bill Discounting (FDBP and IDBP)

Import Finance Facility includes;o Loan Against Trust Receipt (LTR) o Term Loan

Non-funded Trade Finance Facility includes;o L/C Opening (Sight & Deferred) o L/C Advising o L/C Transfer o Bank Guarantee o Secured Over Draft (SOD) in the form of SOD (general/export bill)

and SOD (Others-work order, FDR, land, etc.) o Bank Guarantee in the form of Performance guarantee, Advance Payment

guarantee, and o Bid bond, Inland Bill Purchase (IBP) includes mainly government security

bills and bonds.

o Foreign Bill Purchase (FBP) includes foreign drafts.

MTB Offshore Banking: MTB Offshore Banking services specially tailored for 100% foreign owned

company, joint venture and locally owned company in Export Processing Zones (EPZ). It offers term

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finance, working capital finance and trade finance services in different modes. It also provides term

finance facility to locally owned industrial units outside EPZ under some special conditions.

Syndications & Structured Finance: MTB is active in the Syndication market with professional

team having finest expertise and wide market network for enabling its corporate clients to access large

loans through cost efficient structures. MTB offers tailor made solutions to fit customers’ business

requirements. It also facilitates its peer group in closing their syndicated deals by co-arranging or by

taking large exposures in both Greenfield and Brownfield projects including;

Infrastructure Financing e.g. Power, Telecom, Hotels Aircraft Financing Manufacturing Project Financing e.g. Steel, Cement, Glass, Petrochemical Agro-based Project Financing Micro Financing

MTB’s product basket contains Long Term Financing along with full range of product mix for Short Term Financing of day to day operations and non-fund based facilities. The bank always seeks to understand unique needs of its customers’ business and incessantly strive to meet and to exceed their expectations.

9.3.1.2 Retail Banking MTB offers various retail banking products to meet its customers’ different needs.

a) Deposit Products: MTB has designed various deposit accounts to service its customers’

different needs. From a straight forward Savings account to Fixed Deposits, MTB always strives

to offer the best value for its customers’ money. Banking with MTB enables its customers to

priorities between flexibility, highest interest yield and convenience. Various deposit products

offered by MTB are explained below;

Regular Savings Account: An easy-to-operate savings account that allows customers

to issue cheques, draw Demand Drafts and withdraw cash.

Current Account: A Current account is ideal for carrying out day-to-day business

transactions. With the MTB Regular Current Account, customers can access to their

accounts anytime, anywhere, pay using payable at par cheques or deposit cheque at any

MTB bank branch.

Fixed Deposit: MTB offers fixed deposit products with automatic renewal, overdraft

facility etc.

Brick by Brick: MTB Brick by Brick is a monthly deposit scheme in which any one can

deposit on a monthly basis and at the end of the period gets a handsome amount.

Customer can open this account for 3/5/8/10 years and the monthly installment of this

Plan is BDT 250.00, 500.00, 1,000.00, 2,000.00, 5,000.00, i.e. it can be any amount

multiple of BDT 500.00. The customer may avail loan up to 90% and credit card limit up

to 80% of the payable amount. If the depositor wants to close the account in between

two maturity periods, e.g. 3 and 5 years, 5 and 8 years, 8 and 10 years, s/he will be paid

the full amount admissible for the immediate past maturity period and simple interest on

the deposited amount at the prevailing savings rate for the rest period.

Monthly Benefit Plan: It has been designed to help and assist conscious savers from all

strata of the society. The plan is for 3(three) years and 5(five) years and on maturity the

account will be renewed automatically. A Savings/Current account is required to open

an MBP/MBPs. The monthly benefit will be credited to this account. The customer may

avail loan up to 90% of the deposited amount.

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MTB Double Saver: MTB Double Saver is a fixed deposit scheme where the deposit

doubles in 7 (seven) years. Minimum deposit amount will be of BDT 50,000.00 or any

amount above this instead of its multiple. Account holder can avail loan up to 90% of

the payable amount instead of the deposited amount.

Children’s Education Plan: This product is designed for children where no initial

deposit is required. Monthly installments are Tk. 1,000 or multiples of Tk. 1,000 but

cannot exceed Tk 20,000. The savings periods are 4, 7, 9 and 12 years.

MTB Millionaire Plan: MTB Millionaire Plan is a monthly deposit scheme which will

make a client millionaire after a certain period. The tenure of this scheme is

6/8/10/12/15/20 years. More than one account can be opened by the same depositor

in the same branch. The customer may avail loan up to 90% and credit card limit up to

80% of the payable amount.

MTB Inspire: MTB Inspire provides a range of enhanced services including free debit

card, free internet banking etc. Interest is calculated on daily basis and paid monthly.

MTB Ruby: MTB Ruby enables today’s independent women to enjoy hassle-free

banking services. Besides the core MTB banking advantage, MTB Ruby, an exclusive

savings account for women, is packed with special benefits.

MTB Kotipati: This product has been designed for the customers who want to have

BDT 10 million after certain period through monthly installments of a specified amount.

MTB Junior: MTB Junior is a savings account for minors that offer the opportunity to

save for today and the future. School and college students below 18 years are eligible for

this accounts.

MTB Graduate: MTB Graduate is a savings account for college and university students

who are 18 years and above.

MTB Senior: MTB Senior has been designed keeping in mind the fact that a senior

citizen's banking requirements are wholly different and deserve special attention.

Bangladeshi citizens who are 60 years and above are eligible for this account.

MTB Shanchay: MTB Shanchay, a savings product for the “Base of the Pyramid”. Low

income group who don’t manage their finance due to the lack of available banking

facilities; opening the product would help minimize their financial risks. Minimum

account opening balance is Tk 50. Interest will be calculated on monthly average balance

and credited to account on half yearly basis.

MTB Care: MTB Care, a unique proposition of MTB, is a savings product for children

with special needs. Through this product, special needs children will get assistance from

branches in opening and maintaining the account at a lower cost compared to other

savings products. This is also MTB’s commitment towards helping special children to

have access to banking services.

b) Loan Products: MTB has a comprehensive selection of facilities to offer, from a simple

personal loan, credit cards, auto loan and overdraft facilities to home loan. MTB strives to remain

competitive and are committed to constantly reviewing both its lending policies and rates to

ensure that customers get the best deals in town.

MTB Personal Loan: MTB Personal Loan is simple, convenient and quick. Loan

amount varies from BDT 50,000 to BDT 1,000,000. With flexible repayment options it

has no hidden charge.

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MTB Auto Loan: MTB Auto Loans are built for utmost speed and competence. MTB

Auto Loan is available for financing both new and reconditioned cars. Loan Amount

varies from Tk. 300,000 to Tk. 4,000,000.

MTB Home Loan: Whether it is purchasing a new house or a new apartment, MTB

has a wide range of home loan options that can be customized to customers’ specific

need. Loan amounts from BDT 500,000 to BDT 10,000,000.

MTB Home Equity Loan: MTB offers this loan for house construction, extension,

renovation, face upliftment, finishing work. MTB Professional Loan: MTB Professional Loan is a multi-purpose cash loan which

is collateral free, with fixed monthly installment.

c) Card Products: MTB has designed its card products with a lot of features like – convenient,

instant line of credit, global recognition and acceptance, exclusive privileges and more. MTB’s

range of cards help the card holders to meet their financial objectives.

MTB Credit Card: Its credit cards are accepted at over 23 million Merchant

Establishments around the world, including 110,000 Merchant Establishments in India.

Revolving credit facilities are available with a payment of minimum amount. Card

holders can avail the credit facilities up to 45 days without paying any interest from the

date of purchase.

MTB Debit Card: MTB Visa Debit card can be used as an ATM card at any VISA ATM

across the world, as well as for making purchases at merchant locations. MTB’s Visa

Debit card is extremely versatile and simple to use. It allows the card holders to pay

directly from their bank account for purchases, without having to carry any cash.

d) MTB FlexiPay: It allows the MTB credit card holders to convert any retail transaction with repayment on monthly equal installments. Any retail purchase transaction of BDT 3,000 or above can be converted to FlexiPay without any enrollment fees.

9.3.1.3 Small and Medium Enterprise (SME) Loan SMEs, the engine of growth in Bangladesh, is considered a priority sector as announced by Bangladesh

Bank. MTB has been awarded as Best SME Bank of the Year 2014 at the SME Financing Fair - 2014.

MTB SME Banking has differentiated itself in the market in its business approach. MTB have designed a

number of loan products to meet the needs which are explained below: MTB Bhagyobati: MTB Bhagyobati loan is only for the SMEs owned by the women

entrepreneurs. Loan amount ranges between BDT 1.00 lac and BDT 50.00 lac with

tenure of up to 3 years.

MTB Krishi: MTB Krishi is designed for direct lending in the agriculture sector. Only

eligible farmers and agri SMEs may apply for the loan. Crops cultivation, fisheries,

livestock & poultry are the priority sector of lending. Loan amount can be up to BDT 30

million.

MTB Mousumi: SME customers need additional fund in some occasions, festivals and

seasons. MTB Mousumi enables those SMEs which has seasonal type of business. Loan

amount can be up to BDT 1 million.

MTB Revolving Loan: Any SME, manufacturing, service, trading or farming, requires

working capital for smooth operation of the business. This loan product enables those

SMEs to meet their working capital requirements to support their operations and future

growth. It is CC (H) and revolving type loan. Loan amount can be up to BDT 5 million.

MTB Digoon: MTB Diggon enables the SMEs to get loan double amount of their

deposit. Loan amount ranges between BDT 5.00 lac and BDT 20.00 lac.

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MTB Small Business Loan: This loan enables the SMEs to expand their business.

Loan amount can be up to BDT 5 million.

MTB Green Energy Loan: MTB Green Energy Loan is an environment friendly loan

enables the prospective customers to set up renewable energy projects such as solar,

biogas, wind, hydro and any other potential renewable plant. Any individual, business

entrepreneurs, NGO, institutions having capacity to repay may apply for the loan. Loan

amount can be up to BDT 30 million.

MTB Gunobati – MTB Gunobati offers the lowest rate i.e., 8.5% in market. MTB also recognized as Best Women Entrepreneur Friendly Bank of the Year 2014 besides SME Bank of the Year 2014 at the SME Financing Fair-2014 for its efforts to promote the Women entrepreneurship development.

9.3.1.4 NRB Banking: MTB offers an array of deposit products in local currency for the NRBs who are residing abroad and

want to save their hard-earned money to utilize in future and facilitate their family maintenance. NRB Savings Account: NRB Taka Savings Account offers a regular savings account in

local currency for the NRBs who are residing abroad and want to save their hard-earned

money to utilize in future and facilitate their family maintenance. This is an interest

bearing Taka account in which interest is paid twice a year.

NRB Deposit Pension Scheme (NRB DPS): NRB DPS is a monthly installment base

savings deposit product in Bangladeshi Taka for individuals. It is specially designed for

NRBs and their nominated beneficiaries. NRB Deposit Pension Scheme is a new deposit

product for NRBs as well as new concept since there is no separate or any pension

scheme for the NRBs.

NRB Fixed Deposit (NRB FDR): NRB Fixed Deposit Account will offer a regular

fixed deposit account in local currency for the NRBs who are residing abroad and want

to save their hard-earned money to utilize in future and facilitate their family

maintenance. Tenor of NRB Fixed Deposit: Duration may be One month, Three

Months, Six Months or One Year.

9.3.1.5 Treasury Services MTB treasury offers sophisticated solutions supported by a large sales force and a state of the art dealing

room in Bangladesh. Currently MTB’s team covers Foreign Exchange, Fixed Income, Money Market,

Corporate Sales and Primary Dealers Business. Money Market: Money markets refer to raising and deploying short-term resources, with

maturity of funds generally not exceeding one year. MTB money market is one of the most

active and efficient desk in the interbank market of the country. The money market is sub-

divided into Call Money, Term Money Market, SWAP, Repo & Reverse Repo etc.

DIBOR: Interbank market is considered to be a risk free market, though in reality, the

banks do carry counterparty risk. However, for practical purposes, interbank market

carries lowest risk, not only to sovereign risk; hence the interest rates prevailing in

interbank market constitute "benchmark" rates. The call money rate as indicated by the

overnight Dhaka Interbank Offered Rate is most widely accepted benchmark rate for

corporate debt paper, as also for bank credit extended on floating rate basis.

Foreign Exchange: MTB’s dynamic Corporate and institutional marketing teams

provide up to date market intelligence, advice and timely execution of deals of its

customers throughout the trading day including the following:

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Spot Foreign Exchange, Forward Foreign Exchange, Fx SWAP, Competitive Forex

Rates for Remittances, Export and Import, Market outlook etc.

Primary Dealers Business: Primary dealer system is an agreement between two major

stakeholders in the domestic government debt market. The central bank has given

approval to Mutual Trust Bank Limited as primary dealer (PD) aiming to boost the

country's secondary securities market. The authority has approved Mutual Trust Bank

Limited as PD of the government securities dated November 23, 2009.Central Bank has

taken the latest move to increase the number of market makers to bring dynamism in the

secondary market. Mutual Trust Bank, a dynamic third generation Bank, through its 44

network plans to gradually do business by selling government securities to corporate,

institutions and individuals. The business will be administered by the MTB Treasury

team, which is equipped with state of the art technology, the industry's leading edge

skilled manpower that have expertise in handling government securities trading.

9.4 Business Analysis Based on Solo Financials 9.4.1 Asset Size & Growth

MTBL’s total assets grew significantly during the last 7 years of its operation. At the end of September, 2019, total assets of the company stood at BDT 249,429 million which is 168% higher than that of December 31, 2012. During the last 7 years MTB’s asset size grew at 15.1% CAGR.

Trend in MTBL's Total Assets (BDT mn)

300,000

250,000 249,429

222,445

200,000 201,754

146,073 165,371

150,000

101173 116,301

100,000 93,162

50,000

0

2012 2013 2014 2015 2016 2017 2018 2019 (Till September)

Figure 1: Issuer's Total Assets Size & Growth

9.4.2 Growth of Loans & Advances At the end of September, 2019 total loans and advances of the Bank stood at BDT 181582 million which is 221% higher than that of December 31, 2012. During the last 7 years, MTBL’s total loans and advances size grew at 18.1% CAGR.

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Trend in MTBL's Loans & Advances (BDT mn)

200,000

181,582

180,000 166,145

160,000 145,607

140,000

114,356

120,000

97,589

100,000

77,141

80,000

56,511 59,548

60,000

40,000

20,000

0

2012 2013 2014 2015 2016 2017 2018 2019 (Till September)

Figure 2: Issuer's Total Loans & Advances and Growth

9.4.3 Growth of Deposits MTBL’s deposits and other accounts grew by 17% in 2019 (September) compared to its preceding year to stand at BDT 181,872 million. During the last five (7) years, the Issuer’s total deposit grew at ~14% compound annual growth rate (CAGR).

Trend in MTBL's Deposits (BDT mn)

200,000

181,872

180,000

149,672 155,456

160,000

129,519

140,000 117,149

120,000

94,779

100,000

73,326 83,591

80,000

60,000

40,000

20,000

-

2012 2013 2014 2015 2016 2017 2018 2019 (Till September)

Figure 3: Issuer's Deposit Size and Growth

The Issuer has managed to keep its advance deposit ratio (ADR) at 81.92% at the end of September, 2019.

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Advance to Deposit Ratio

83.45% 82.83% 82.42%

81.92%

80.30%

77.69%

2014 2015 2016 2017 2018 2019 (Till

September)

Figure 4: Historical Advance Deposit Ratio

9.4.4 Operational Performance

Table 7: MTB’s Operating Performance

In BDT million otherwise stated

2014 2015 2016 2017 2018

2019 (Till Sep.)

NIM 1,835 2,813 3,878 4,308 5,251 4,095

Profit before 2,603 2,811 3,408 3,916 4,884 3,972

provision

Total Provision 674 537 947 1,656 2,342 1977

Profit before tax 1,929 2,274 2,461 2,259 2,542 1,994

Net profit after tax 962 1366 1464 1,980 1,734 1,234

Cost to Income 54.25% 57.28% 54.65% 53.86% 50.31% 50.78%

(ratio)

Cost income ratio was 50.78% in September, 2019 which is slightly higher than previous year’s ratio. The ratio, which measures operating expense as a percentage of operating income, is used to gauge efficiency and productivity for financial institutions. The average cost income ratio was 53.52% over the period from 2014 to 2019.

MTB’s return on assets (ROA) and return on equity (ROE) were 0.52% and 8.65% respectively.

Table 8: Key Ratios for Last 5 years

2014 2015 2016 2017 2018 2019 (Till Sep.)

CRAR 10.77% 12.02% 11.29% 13.76% 12.86% 12.40%

Loan-Deposit 80.30% 82.42% 77.69% 83.45% 82.83% 77.54%

NPL 2.67% 2.08% 4.36% 4.30% 5.39% 6.62%

Cost-income ratio 54.25% 57.28% 54.65% 53.86% 50.31% 50.77%

Return on Average Assets 0.88% 1.04% 0.94% 1.08% 0.82% 0.52%

Return on Average Equity 15.74% 17.40% 15.61% 18.35% 13.85% 8.65%

Earnings per share (BDT) 3.12 3.7 3.3 3.89 3.03 1.9

NAV per share (BDT) 22.00 24.18 19.26 23.08 23.16 22.78

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9.5 Profile of the Board of Directors MTB’s Board of Directors consists of highly reputable businessmen and professionals. The current

Board of Directors comprises:

Mr. Md. Hedayetullah, Chairman

Mrs. Khwaja Nargis Hossain, Vice Chairman

Mr. Syed Manzur Elahi, Director (Founding Chairman)

Dr. Arif Dowla, Director

Mr. Rashed Ahmed Chowdhury, Director

Mr. M. A. Rouf, JP, Chairman

Mr. Md. Abdul Malek, Director

Mr. Md. Wakiluddin, Director

Mr. Anika Chowdhury, Director

Mr. Md. Manirul Islam, Director

Mr. Herbert Ludwig Jaeger, Director

Ms. Nasreen Sattar, Independent Director

Mr. M. Mokammel Haque Independent Director

Mr. Anis A. Khan, MD & CEO Mr. Md. Hedayetullah, Chairman Mr. Md. Hedayetullah is the Chairman of Mutual Trust Bank Ltd. (MTB). Prior to his new role, he was the Vice Chairman of the Board from February 26, 2016 to May 30, 2018. He was also the Chairman of the Executive Committee of the bank. He is presently serving as the:

Chairman of Hedayetullah Securities Ltd. Managing Director of FB Footwear Ltd. Managing Director of Footbed Footwear Ltd. Director of Apex Tannery Ltd. Director of Apex Property Development Ltd.

Mr. Hedayetullah obtained B.Sc. (Honors) degree in Leather Technology from the British School of

Leather Technology, Northampton, UK and M.A. in International Business from Webster University,

Regents College, London, UK. Mrs. Khwaja Nargis Hossain, Vice Chairman Mrs. Khwaja Nargis Hossain is the Vice Chairman of the Board of Mutual Trust Bank Limited (MTB).

Mrs. Hossain received Master’s Degree in Islamic History from the University of Dhaka. She is also the

Managing Director of SAHCO Securities Limited, Corporate Director of SAHCO International Limited

and a Member of BOAO Forum for Asia (BFA), China. BFA is a non-profit international organization

formed by twenty six Asian Countries and Australia for socio-economic development of the people of

Asia and rest of the world. Mr. Syed Manzur Elahi, Director (Founding Chairman) Mr. Syed Manzur Elahi is the Founding Chairman of Mutual Trust Bank Ltd. (MTB) and Pioneer Insurance

Company Limited and currently serving as the Chairman of the Executive Committee of the bank. Mr.

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Elahi is the Chairman of Apex Group, a leading business conglomerate in Bangladesh, and has won

various awards for his contributions to trade and industry including:

“Business Executive of the Year 2000" by the American Chamber of Commerce (AMCHAM),Bangladesh

“Business Person of the Year 2002" award, sponsored by the Daily Star and DHL Worldwide

Express Besides being an eminent industrialist, he was also appointed Adviser to the Caretaker Government of

Bangladesh, twice (1996 & 2001), for his leadership qualities, professionalism and non-partisanship. Mr.

Elahi holds an M.A. (Econ.) from the University of Dhaka. Mr. Elahi is currently the Chairman of • Apex Tannery Ltd. • Apex Footwear Ltd. • Apex Pharma Ltd. •

Blue Ocean Footwear Ltd. • Apex Enterprises Ltd. • Apex Investments Ltd. • Grey Advertising

(Bangladesh) Ltd. • Quantum Market Research • Manusher Jonno Foundation • Holiday Publications •

Bangladesh Freedom Foundation. He is also • Director of International Publications Limited, the owning company of The Financial Express • Director of Credit Rating Agency of Bangladesh Limited (CRAB) • Director of Central Depository

Bangladesh Ltd. (CDBL) • Member of the Board of Trustees of East West University • Member of the

Board of Trustees of Centre for Policy Dialogue (CPD) • Member of the Trustee Board of Diabetic

Association of Bangladesh. Previously, Mr. Elahi has served as • Chairman of the Bangladesh Association of Banks (BAB) • Chairman of

the East West University Foundation (EWUF) • Chairman of Central Depository Bangladesh Ltd. (CDBL) •

Vice Chairman of the Bangladesh Association of Publicly Listed Companies (BAPLC) • Director on the

Boards of Bangladesh Bank, Sonali Bank and Bangladesh Krishi Bank • Director of the Export Promotion

Bureau, Bangladesh • President of the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) •

President, Bangladesh Employer Association (BEA) • President of the Dhaka University Alumni Association

(DUAA) • Honorary Consul for Belgium in Bangladesh. Dr. Arif Dowla, Director Dr. Arif Dowla served as Chairman of Mutual Trust Bank Limited (MTB) from January 17, 2012 to

February 26, 2014. Son of Mr. M. Anis Ud Dowla, a leading name in Bangladesh's corporate business,

trade and industry arena, Dr. Dowla is the Managing Director of the renowned conglomerate, Advanced

Chemical Industries (ACI) Ltd. as well as its following subsidiaries.

ACI Pure Flour Limited ACI Foods Limited ACI Motors Limited ACI Logistics Limited ACI Agrolinks Limited Premiaflex Plastic Limited Stochastic Logic Limited.

Besides, Dr. Dowla is also the Chairman of Tetley ACI (Bangladesh) Ltd. He is a Director of • ACI Formulations Limited • ACI Salt Limited • ACI Edible Oils Limited • ACI Godrej

Agrovet (Pvt.) Limited • Creative Communication Limited • Consolidated Chemicals Limited • ACI

Healthcare Limited-Vice Chairman • ACI Chemicals Limited • Bangladesh Business Publications Limited, a

publishing company of the bi-monthly Business Bangladesh magazine • Infolytx Bangladesh Limited. He is a member of the Board of Governors of the Society for Promotion of Bangladesh Art (SPBA).

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Dr. Dowla obtained a Ph.D. degree in Mathematics from the University of California, San Diego, USA. He is a

member of the American Mathematical Society and a Young Global Leader Honoree 2009 bestowed by World

Economic Forum. He is also the Honorary Consul of the Kingdom of Belgium in Bangladesh. Mr. Rashed Ahmed Chowdhury, Director Mr. Rashed Ahmed Chowdhury is a Director of Mutual Trust Bank Limited (MTB). Prior to assuming

this role, he was the Chairman of the bank and its three subsidiary companies. Mr. Chowdhury is the:

Chairman of Banga Garments Ltd. Chairman of ABC Building Products Ltd.

Founder Trustee and Chairman of the Board of Trustees of Independent University, Bangladesh

(IUB) President and Founding member of Cadet College Club Limited

Chairman of Bangladesh Business Publications Limited, a publishing company of the bi-monthly

Business Bangladesh magazine Senior Vice President of Bangladesh Squash Rackets Federation

He is also a:

Director of Associated Builders Corporation Ltd. (ABC), a pioneer in the field of construction

and real estate development in Bangladesh Director of ABC Real Estates Ltd. Director of Shamsuddin Towels Ltd.

He has served as:

Senior Vice President of Bangladesh Terry Towel Manufacturers and Exporters Association President of the Rotary Club of Dhaka Central Assistant Governor of Rotary District-3280

Mr. Chowdhury obtained a Higher National Diploma in Business Studies from West London College,

UK and a Post Graduate Degree in Business Management from Kingston University of the United

Kingdom. He is a member of the Chartered Management Institute, UK. Mr. M. A. Rouf JP, Chairman Mr. M. A. Rouf, JP is the Director of Mutual Trust Bank Limited (MTB). Prior to this role, he served as

the Chairman of the bank and its three subsidiary companies, MTB Securities Limited, MTB Capital

Limited and MTB Exchange (UK) Limited, from February 26, 2016 to May 31, 2018. He is the Chairman of Britannia Group, a British-Bangla Joint Venture real-estate Company. Besides, he

is also the Vice Chairman of Sonata Shipping Lines Ltd. And a Director of Tiger Tours Ltd. Mr. Rouf is a renowned Personality and holds several prestigious positions at the international level. He is

a Justice of Peace (JP) for Scotland. Besides, he has been serving as the elected Regional President for the

Bangladesh British Chamber of Commerce in the UK for Scotland for the last fourteen years. He was also

appointed as a Delegate for the Department of British Trade Mission of Bangladesh. He is a senior vice-

president of UKBCCI (UK Bangladesh Catalysts of Commerce and Industry). Mr. Rouf was the Financial

Director for Scottish Cancer Research Centre for 8 years. Presently Mr. Rouf is serving as the Chairman of following foreign company:

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Diamond Properties, UK- one of the buildings the company has built received the Civic Trust

Award from the Scottish Building Authority. This was the first time an enterprise with a South

Asian background has received this accolade. He is a lifetime member of the University of St. Andrews and also a member of St. Andrews Golf Club,

which is considered to be the home of golf in the world. He has also held the post of Honorary Vice

Chairman of St. Andrews University Union Debating Society for the last 17 years and currently is the

president of St. Andrews University Cricket Club. Mr. Md. Abdul Malek, Director Mr. Md. Abdul Malek, Director of Mutual Trust Bank Ltd. (MTB), obtained B.Sc. Engineering (Civil)

from BUET, a renowned engineering institution of the country. He has vast experience and special skills

and expertise in structuring and developing, calamity and devastation resilient and green buildings along

with a glorious tradition in construction of multi-storeyed buildings He was the Chairman of Sheltech Consultants (Pvt.) Ltd. (SCPL), a major practitioner in Urban Planning,

Architectural, Engineering Design and Tourism Development. SCPL has successfully completed many

projects, for major international Development Funding Agencies, which includes the Asian Development

Bank (ADB), The World Bank, United Nations Development Program (UNDP), European Economic

Community (EEC), Swiss Agency for Development and Corporation (SDC), Finnish International

Development Agency (FINNIDA), United States Agency for International Development (USAID),

United Nations Children’s Fund (UNICEF), Department for International Development (DFID),

Directorate-General for International Cooperation (DGIS) and Royal Netherlands Embassy (RNE), on

behalf for Govy. Of Netherlands. SCPL has earned a good recognition both locally and internationally.

He has also vast experience in the Garments Sector. Mr. Md. Wakiluddin, Director Mr. Md. Wakiluddin, Director of Mutual Trust Bank Limited (MTB), is the Chairman of Baridhara

Enterprise (Pvt) Ltd., and Baridhara Corporation Ltd. He is also the Managing Director of Swadesh

Properties Ltd., Director of HURDCO International School and Managing Director of Swadesh Global

Media Ltd. Mr. Anika Chowdhury, Director Ms. Anika Chowdhury is a Director of Mutual Trust Bank Limited (MTB), granddaughter of the iconic

and legendary MTB Chairman, late Mr. Samson H Chowdhury and daughter of Mr. Tapan Chowdhury,

Managing Director of Square Pharmaceuticals Ltd. and former Adviser to the Caretaker Government of

Bangladesh in 2007. She received Master’s Degree in Business Administration from the University of Columbia, New York. She is also the Managing Director of Square Health Limited, Director of Square Fashions Ltd. and

Management Coordinator of Square Group, the leading business conglomerate in Bangladesh Mr. Md. Manirul Islam, Director Mr. Md. Manirul Islam, Director of Mutual Trust Bank Ltd. (MTB), completed B.Com (Hons), M.Com

(Accounting) from Dhaka University in 1976 and passed BIA Diploma from Bangladesh Insurance

Academy in the year 1985. During his service in Shadharon Bima Corporation, he worked in various

departments such as underwriting, Claims, Accounts, Re-insurance, Finance & Investments etc. and

gathered extensive knowledge and experience. He worked as General Manager Finance, Re-Insurance,

Underwriting, Claims and Dhaka Zonal office and retired voluntarily on September 30, 2012 and joined

Pragati Insurance Company Ltd. on 1st October, 2012.

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During the service period he attended many insurance related seminars, symposium and workshops. He

participated in various professional training courses at home and abroad. Mr. Islam is now a renowned

insurance personality. Apart from insurance industry, Mr. Manirul Islam is well associated with various

social organisations. He was a councillor of Bangladesh Football Federation (BFF). He was also a councillor and former

member of the Finance Committee of Bangladesh Cricket Board (BCB). Mr. Islam was member (nominated) of the Board of Directors:

National Housing Finance & Invsetment Ltd. IDFC Ltd. IDFC Securities Ltd. KAY & QUE (Bangladesh) Ltd.

Former Member

Central Rating Committee – IDRA Fire Rating Sub-Committee – IDRA

Member

Misc. Rating Sub-Committee – IDRA PSB (Public Sector Business) Management Committee of Co-Insurance Scheme

Mr. Herbert Ludwig Jaeger, Director Herbert Ludwig Jaeger has over 36 years of experience in corporate finance and accounting, export

financing, controlling, IT, and development finance. Mr. Jaeger has work experience in Advans MFI

Myanmar Company Limited, Mandalay, Myanmar and, presently, is a member of the Board of Directors

and its Audit Committee since 2018. He serves as Investment Director, Financial Institutions of Norfund – The Norwegian Investment Fund for Developing Countries at the Norfund Bangkok Office.

He has served as Investment Director of DEG – The German Investment and Development Company,

Thailand Representative Office. He contributed in that role in business development of financial

institutions in Bangladesh, Myanmar, Cambodia, Vietnam and Laos, financial engineering, project

development, due diligence, portfolio management and cooperating with other developmental financial

institutions and commercial banks.

He worked as a Vice President / Senior Investment Manager of DEG – The German Investment and

Development Company, Köln, Germany and Senior Investment Manager of Apatar Radolfzell GmbH,

Radolfzell, Germany (packaging industry, subsidiary of Apatar Inc., NYSE listed). As the Vice President

of DEG in Köln, Germany, he was responsible for debt financing of financial institutions in Asia,

financial engineering, project development, due diligence, portfolio management, cooperating with other

developmental financing institutions and commercial banks and represented DEG at government level. Mr. Jaeger began his career as Credit Manager, Export Financing in 1985, where he served for 5 years from

1985 to 1989 and took part in International Business Trainee Programme, worked in subsidiaries and partner

banks in London and Luxembourg, where he took the role of Credit Manager for export financing.

During his service with Landesbank Rheinland-Pfalz GmbH, Germany (Central Bank of saving banks) as

Head of Accounting & IT from 1993 to 1995 and member of the management board, he took a number

of important roles in developing the complete IT infrastructure and complete internal organization

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structure and process organization, developing controlling tools for bank reporting and internal control

systems.

After that, he started working for ISB – Investitions- und Strukturbank Rheinland-Pfalz GmbH,

Germany (Development Finance Institution) as Chief Financial Controller and member of the

Management Board from 1995 and served till 1998. Here, he contributed in various responsibilities like

re-organization of cost controlling department, development of controlling tools for consolidation,

reporting, budgeting, reporting to European headquarters in Paris, benchmarking of European

production sites and planning and implementation of SAP software.

Mr. Jaeger obtained his MBA in International Financial Management from the University of Trier,

Germany and completed his Bachelor of Economics from the University of Konstanz, Germany. He is a

Graduate member of the Thai Institute of Directors and has completed Bank Training at Volksbank eG,

Überlingen, Germany.

Mr. Jaeger possesses core competencies and wealth of experience in corporate finance, project

development, including creating and evaluating business plans, financial projections, business

development, due diligence, team leadership, intercultural management, negotiations and has a strong

entrepreneurial attitude.

Ms. Nasreen Sattar, Independent Director Ms. Nasreen Sattar is an Independent Director of Mutual Trust Bank Limited (MTB). Prior to joining

MTB, she was an Independent Director and Member of Executive Committee & Audit Committee of

IPDC Finance Limited – IPDC is a Non-Banking Financial Institution with foreign and local Institutional

investors including Government of Bangladesh. Ms. Sattar began her banking career with ANZ Grindlays Bank, Bangladesh as a Management Trainee

Officer, in 1986, where she served for 6 years in various roles, including the Head of Institutional

Banking. In the year 2007, she joined Standard Chartered Bank, where she took various important roles,

including the Regional Head for Development Organizations for South Asia. Prior to joining CONSUMARK, a niche service provider in the areas of Human Resource Management,

and Outsourced Services, she was the Chief Executive Officer of Standard Chartered Bank, Afghanistan. During her service in Standard Chartered Bank, Afghanistan as a Chief Executive Officer, she managed

challenges of security, volatility in nascent financial markets, with limited options for revenue generation

and developed local staff, created retention culture. She, in line with Standard Chartered Bank Group

Policy, also developed local resources to replace senior level expatriate jobs. She, as a member of

Afghanistan Bank Association (ABA), assisted Central Bank (DAB) with anti-money laundering issues

and other financial sector issues. During her service in Standard Chartered Bank, Afghanistan, she

successively attained Camel Rating 1 for two years by Central Bank Audit Inspection. In 2012 Standard Chartered Bank sold its business in Afghanistan to a leading local bank – Afghanistan

International Bank (AIB). She was invited by Afghanistan International Bank (AIB) to join a team of

International Consultants on a short-term assignment for three months to help integration/transition of

business from Standard Chartered to AIB and in skills development for the latter institution. Mr. M. Mokammel Haque, Independent Director Mr. M. Mokammel Haque, a retired Secretary of the People’s Republic of Bangladesh Government, is an

Independent Director of Mutual Trust Bank Limited (MTB). He also serves as Chairman of Kabi

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Mozammel Haque Foundation and Member of Underprivileged Children Program (UCEP). Prior to

joining MTB, he was an Independent Director of Pioneer Insurance Company Limited. Mr. Mokammel began his career as Lecturer, Political Science Department of the University of Dhaka.

After 2 years in 1960, he joined Government of Pakistan as Assistant Commissioner under Training and

worked till 1966 as SDO, Bagerhat, Govt. of East Pakistan and Senior Scale Section Officer,

Establishment Division, GOP respectively. He joined Government of Bangladesh in 1968 as Deputy Commissioner of undivided Sylhet, Mymensing,

Chattogram and Dhaka District. He served Government of Bangladesh till 1975 as Director General,

Integrated Rural Development Program (IRDP). Mr. Mokammel worked as Vice-Chairman, World Trade Centre and Member of the Executive Board,

UNICEF from 1977 to 1980. He also served Rupali Bank Limited as a Director from 1977 to 1980. Mr. Mokammel started serving Government of Bangladesh in 1980 again as Director, Commonwealth

Secretariat, London, UK and served there till 1986. He served various important Ministries of the People’s Republic of Bangladesh:

Secretary, Ministry of Education, Government of Bangladesh (1974-75) Secretary, Ministry of Land, Government of Bangladesh (1986-89) Secretary, Ministry of Commerce, Government of Bangladesh (1990) Secretary, Ministry of Health, Government of Bangladesh (1991-92)

Mr. Mokammel also served different Government Agencies:

Vice Chairman, Export Promotion Bureau (EPB), Government of Bangladesh (1977-80)

Member, Programming and Socio Economic Infrastructure Division, Planning Commission,

Government of Bangladesh (1992-94) Executive Chairman, Board of Investment (BOI), Government of Bangladesh (1994-95)

Minister-Executive Chairman, Board of Investment (BOI), Government of Bangladesh (1999-

2001) He was Chairman of Janata Insurance Company Limited from 1997 to 98. Life Member: Bangladesh Economic Association and Bangla Academy Diabetic Association of Bangladesh (BADAS) Mr. Mokammel obtained his M. A. in Political Science from the University of Dhaka in 1957 and

completed his Bachelor of Honours (BA) in Political Science from the University of Dhaka in 1956. He

completed his CFS exam in 1959 and Diploma in Development Administration, London School of

Economics, London, UK. Mr. Anis A. Khan, MD & CEO

Mr. Anis A. Khan (AAK), a Fellow of the Institute of Bankers Bangladesh (IBB), has had over 36 years

of experience and training in banking, capital markets, management, and leadership practices. Anis also

serves as the Vice Chairman of the Industrial & Infrastructure Development Finance Company Limited

(IIDFC), Director and Chairman of the Executive Committee of BD Ventures Limited, Independent

Director and Chairman of the Board Audit Committee of Berger Paints Bangladesh Limited (BPBL) and

Vice President of the Bangladesh Association of Publicly Listed Companies (BAPLC). He is the recipient of numerous accolades including the ‘Business & Entrepreneur Excellence Award 2016’,

where he was recognized as the ‘Inspirational Business Leader of the Year’, at a ceremony held in London,

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United Kingdom and which was organized by the UK Bangladesh Catalysts of Commerce & Industry

(UKBCCI) on November 20, 2016. AAK is the Immediate Past Chairman of the Association of Bankers, Bangladesh Limited (ABB) and a

former Chairman of Primary Dealers Bangladesh Limited (PDBL). He has also served as the Chairperson

of the SWIFT Member & User Group of Bangladesh. MTB, under his leadership over the past ten years, has achieved a leading position in the business arena

and received the prize for the best “Women Entrepreneur Friendly Bank of the Year” and Best “SME

Bank of the Year”, in 2014, from Bangladesh Bank and the SME Foundation. In 2015, MTB was awarded

the prestigious DHL-The Daily Star Bangladesh Business Award and recognized as the ‘Best Financial

Institution of 2014’. A career banker, AAK started his career with the then British-owned Grindlays Bank plc. as a Management

Trainee in 1982 and went on to serve its successor banks – ANZ Grindlays Bank and Standard Chartered

Bank, in a diverse array of roles both at home and abroad. In 2002-2003, he served as a regional head for

Standard Chartered Bank (SCB) responsible for The Gulf countries based in Dubai, UAE. After serving SCB and its predecessor banks for 21 years, AAK went on to head IDLC Finance Limited,

the country’s largest financial institution (non-banking) for six years from 2003-2009 as its CEO &

Managing Director. He has also served as a government nominated Director of Chittagong Stock Exchange Limited for four

years. AAK served the country’s pre-eminent Metropolitan Chamber of Commerce and Industry (MCCI)

as Vice President for two successive terms during the years 2014 and 2015. He continues to serve MCCI

as a member of the Chamber Committee. A regular speaker on the global circuit, he has demonstrated his competencies in the field of finance,

banking and management and presented papers as follows:

In June 2015, on “Financing the Transformation of the Bangladesh Garments Industry” at theSchool of South Asian Studies, University of Harvard, Cambridge, Massachusetts, USA.

On May 12, 2017 at the Bangladesh Development Conference at Harvard University, Boston, MA,USA. His subject matter was ‘Achieving SDGs: Financial Inclusion, Bangladesh Perspective’.

Most recently, in March 2019, on the Bangladesh Economy and The State of Banking in

Bangladesh at an international conference held under the aegis of Bangladesh Development Initiative at the School of Management, Yale University, USA

He has attended:

“The Executive Program in Corporate Governance and Strategic Management” at the HaasBusiness School of the University of California, Berkeley in May 2014

The Value Creation in Banking and Strategic Management Program held at INSEAD, Fontainebleau, France in October 2015 f In May 2017, a customized training programme at The London School of Economics and Political Science organized by LSE Custom Programs

The Cambridge Executive Program in Corporate Governance: A Global Banking Perspective

Program held on April 14 -17, 2019 at the Judge Business School – University of Cambridge, UK

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9.6 Profile of Senior Management

Anis A. Khan Managing Director & CEO

Anis A. Khan (AAK), a Fellow of the Institute of Bankers Bangladesh (IBB) is one of the most prominent and

senior-most bankers of our country. He holds a LL.B. (Honours) degree and also a LL.M. (Masters) degree

(First Class First) from the University of Dhaka. Mr. Anis A. Khan has carved out a career spanning over 35

years in the corporate world and still continues to work hard with unabated zeal and enthusiasm. He has been

serving as the Managing Director and Chief Executive Off icer (MD & CEO) of Mutual Trust Bank Limited

(MTB) for 10 years. MTB appointed Mr. Anis A. Khan as the Managing Director & CEO of the bank in April,

2009 for a period of three years as per the Bank Companies Act. He was re-appointed for further periods, and,

lastly, for four years and seven and a half months, with eff ect from April 15, 2015 until December 01, 2019

(the mandatory retirement age). This was confirmed by the Bangladesh Bank, considering his leadership

qualities and contributions towards diversifying the bank’s products and services, expansion of the branch

network. He has also contributed to the setting up of three fully-owned subsidiaries - MTB Securities Limited,

MTB Capital Limited and MTB Exchange (UK) Limited.

Syed Rafiqul Haq, DMD & CBO Deputy Managing Director & Chief Business Officer (CBO)

Mr. Syed Rafiqul Haq joined Mutual Trust Bank Ltd. (MTB) as Deputy Managing Director. Prior to his joining MTB, he was the Area Head, Corporate Banking of Eastern Bank Ltd., an organization he joined in 1998. Rafiq, who completed his MBA from the Institute of Business Administration (IBA) after doing his M.Sc from the University of Dhaka, started his career with IFIC Bank Limited as a Probationary Officer in 1984. During his tenure with the Bank, he served different departments including discharging of responsibility as Branch Manager. A veteran in the banking Industry, Haq has received multifarious professional training at home and abroad including International Banking from Commerzbank, Frankfurt, Germany and Unicredit Bank, Milan, Italy.

Tarek Reaz Khan Deputy Managing Director

Earlier he joined MTB as Senior Executive Vice President and Head of SME Banking & Retail Banking in

2015. Tarek brings in over 22 years of experience, of which nearly 19 years is in the banking arena, having

commenced his career as a Management Trainee at Beximco Group in 1994. He began his banking career with Standard Chartered Bank (SCB) as an officer in 1997, where he served for more than 16 years. His key roles in SCB were: Head of Nasirabad and Banani Branches (Chittagong), Value Centre General Manager – Secured Lending, Head of Operational Risk, General Manager – Lending and Bancassurance and General Manager – Retail Banking Products and Wealth Management. This was followed by a stint at Premier Bank Limited in the capacity of Deputy Managing Director and Chief Operating Officer, where he was leading SME and Retail, Banking Operations and IT Divisions. Prior to joining MTB, he was with Bank Alfalah Ltd. as Head of Branches and Retail Banking. He is a permanent member of Dhaka Club, Army Golf Club and Mainamati Golf and Country Club. He is an avid golfer and he loves travelling. He along with his family have travelled to thirty-three countries of the world.

Goutam Prosad Das Deputy Managing Director & Group Head of Internal Control & Compliance

Bangladesh Bank, vide its BRPD Circular No. 03, dated March 08, 2016, circulated the revised ‘Guidelines on

Internal Control and Compliance in Banks’ to all scheduled banks, with advice to implement the directives of

the guidelines. In line with the new directives of Bangladesh Bank, as well as to comply with

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the applicable laws and regulations and corporate governance notification of Bangladesh Securities and

Exchange Commission, Mutual Trust Bank has restructured its Internal Control and Compliance Division, and

appointed Mr. Goutam Prosad Das, Deputy Managing Director, as the Head of Group Internal Control and

Compliance (GICC). He supervises all the three divisions that are under ICC Department. The divisions have

been revamped in light of the revised guidelines. The Bank has an Internal Control and Compliance Policy and

a Compliance Manual, duly approved by the Board of Directors. As the Head of GICC, Mr. Goutam reviews

and monitors Bank’s Internal Control and Compliance Risk.

Sayed Abul Hashem, FCA, FCMA

Senior Executive Vice President & Group Chief Financial Off icer (GCFO)

The Board has appointed Mr. Sayed Abul Hashem as Senior Executive Vice President & Group Chief

Financial Off icer (GCFO) of the Bank. He attends the meetings of the Board of Directors. Duties of the GCFO include ensuring compliance with the applicable laws and regulations and corporate governance guidelines and to assist the CEO regarding various issues related with financial operation and control.

Malik Muntasir Reza Senior Executive Vice President & Group Company Secretary

The Board has appointed Mr. Malik Muntasir Reza as Senior Executive Vice President & Group Company Secretary and Secretary to the Board of Directors and its Committees to assist the Board in fulfilling its tasks. Duties of the Secretary include providing advice and ensuring compliance with the applicable laws and regulations, which is consistent with the Corporate Governance Notification.

Bakhteyer Hossain, CDCS Senior Executive Vice President & Head of MTB International Trade Services (MITS), MTB Financial Institutions Services (MFIS)

Mr. Hossain is a seasoned banker with over twenty-four years of experience with specialization in International Trade. He is currently heading MTB International Trade Services (MITS) Division of Mutual Trust Bank Limited (MTB) - a reputed private sector commercial bank in Bangladesh. Prior to joining MTB, he rendered his services to Agrani Bank Limited - one of the largest nationalized commercial bank of the country. As a part of his portfolio in the MTB, he looks after the Centralized Trade Operations of MTB, Financial Institutions, Offshore Banking Unit (operations), SWIFT, MNC Banking and Trade Development & Facilitation department. Being an MBA from Australia, with specialization in International Business, Finance & Banking and Strategic Human Resources Management (SHRM)

He is the member of numbers of committee at local trade body and in international trade wings including but not limited to the Panel of experts of ICC Documentary Instruments Dispute Resolution Expertise (DOCDEX) Services of International Chamber of Commerce (ICC), Paris, France, member of ICC Banking Commission – Bangladesh and Export SubCommittee of the oldest business body of Bangladesh, the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, Bangladesh.

Mr. Md. Shamsul Islam Senior Executive Vice President and Group Head of Treasury

Mr. Islam began his career with International Finance Investment and Commerce Bank Limited (IFIC) as a

Probationary Office in 1997, where he served for more than 8 years. His main areas of jobs in IFIC Bank

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were in Special Projects Division, International Division and in Treasury Division. Before joining in MTB

Mr. Islam worked more than 8 years in different areas in Southeast Bank Ltd. with proven track record.

He successfully served and lead as In-charge Consumer Financing, In-charge Product Development Cell,

Co-coordinator and Contact person of Basel-II implementation unit and overall In charge of Treasury

Division. He also worked National Bank Limited in the area of International Division for several months

prior joining MTB.

He has a proven track record in Treasury Operation and Risk management vis a vis business growth of

the bank. He has over 21 years of Banking experience, of which more than 13 years in the areas of Money

Market, Govt. Security Market, Foreign Exchange Market, Asset Liability Management, Primary

Dealership Activities and overall Treasury and risk management of the Bank. He has attended many home

and overseas training courses and workshops, which includes: Integrated Treasury Management, Foreign

Exchange Bourse Course, Advanced Asset Liability Management, Technical Analysis, Foreign Trade,

Primary Dealership Activities, Capital Adequacy, Risk Management etc. He completed his post-graduation

(M.Com) from the Department of Management of the University of Dhaka and MBA in Finance from

UK. He is and active member and vice president of Bangladesh Money Market Dealers Association

(BAMDA), technical committee member of Primary Dealers Bangladesh Limited (PDBL).

Shah Alam Patwary

Senior Executive Vice President & Group Chief Information Off icer (GCIO)

Md. Shah Alam Patwary, a Computer Engineer from Bangladesh University of Engineering and Technology (BUET), is serving the Mutual Trust Bank (MTB) for more than 11 years with a working experience for more than 24 years in information technology. As per BRPD Circular letter no 03 dated March 25, 2018, He is responsible for bank technology and presently he is project manager (IT) for MTB Core Banking System Transformation Project (MCT).

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10 Description of Encumbered and Unencumbered Assets with Value Thereof

10.1 Encumbered Assets Mutual Trust Bank Ltd. has no encumbered assets as on 30 September 2019.

10.2 Unencumbered Assets All the assets of the Issuer including all fixed assets are unencumbered as on 30 September 2019.

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11 Description of Assets and Liabilities

11.1 Description of Assets (Solo) Since Mutual Trust Bank Limited is a commercial bank, most of its assets are financial assets like loans & advances, bills discounted, government treasury securities, debt and equity securities issued by corporates, etc. while loans & advances comprises the lion’s share of the company’s total assets. At the end of September, 2019 total assets of MTB stood at BDT 249429.22 million. Details breakdown of total assets are given below.

Table 9: Composition of Total Asset

Types of Assets

30 September 2019

BDT mn

Cash 14,185.2

Balance with Other Banks & Financial Institutions 4,471.48

Money at Call and Short Notice 1,580.0

Investments 34,945.97 Loans and Advances 179,747.38

Fixed Asset including Premises, Furniture & Fixture 3,404.17

Other Assets 10,840.53

Total Assets 249429.22

Cash: MTB’s Cash & Cash equivalents at the end of September 2019 stood at BDT 14,185.2 million and most of that was kept with Bangladesh Bank.

Table 10: Details of Cash

30 September 2019

BDT mn

In Hand (Including foreign currency) 3,363.29

Local Currency 3,337.05

Foreign Currency 26.24

Balance with Bangladesh Bank and its Agent Bank 10,801.45

Balance with Bangladesh Bank (Local Currency) 10,233.75

Balance with Bangladesh Bank (Foreign Currency) 427.23

Balance with Agent Bank 140.46

Total Cash & Cash Equivalent 14,185.2

Balance with Other Banks & Financial Institutions: MTB’s total Balance with other banks and financial institutions stood at BDT 4,471.48 million on solo basis at the September end of 2019, out of which BDT 2,172.97 million was outside Bangladesh.

Table 11: Balance with Other Banks & Financial Institutions 30 September 2019

BDT mn

In Bangladesh 2,298.51

Outside Bangladesh 2,172.97

Balance with Other Banks & Financial Institutions 4,471.48

Money at Call and Short Notice: MTB has BDT 1,305 million outstanding balance lent in call and short notice as on September 30, 2019.

Table 12: Details of Money at Call and Short Notice 30 September 2019

BDT Mn

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Inside Bangladesh 350.0

Outside Bangladesh 955.0

Total Money at call and on short notice 1,305.0

Investments: MTB’s total investments of September 30, 2019 was BDT 34,945.97 million of which 91% were invested government securities.

Table 13: Details of Investments

30 September 2019

BDT mn

Government Securities 31,812.94

Treasury Bills 5,368.29

Treasury Bonds 2,6442.81

Prize Bonds 1.84

Others 2,175.45

Investment in Quoted Shares 540.97

Investment in Un-quoted Shares 229.88

Subordinated Bond 1,187

Other 2,175.45

Total Investment 34,945.97

Loans and Advances: Out of the BDT 179,747.38 million total loans and advances, BDT 48,924.58 million was Term Loan (27.2%). Table 14: Details of Loans and Advances

30 September 2019

BDT mn

Overdraft 18,632.94

Cash Credit 26,589.38

Term loan 48,924.58

Bills under LC 19,411.7

Trust Receipt 12,057.42

Packing credit 548.31

Loan-EDF 6,897.42

Consumer Loan 111.12

Staff Loan 875.87

Bills Purchased & Discounted 1,834.4

Total Loans and Advances 179,747.38

Fixed assets: MTB’s fixed assets include land, buildings, machineries & equipment and furniture and fixtures among

others. At the end of September, 2019 MTB’s total net fixed assets stood at BDT 3,404.18 million.

Table 15: Details of Fixed Assets

30 September 2019

BDT mn

Land and Building 1,559

Furniture and fixtures 1,459.43

Office appliances 2,296.33

Motor vehicles 155

Intangible Assets 230

Total Cost 5,701.84

Less: Accumulated Depreciation 2,371.01

Written down value at the end of the year 3,330.83

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Other Assets: MTB’s other assets include investments in subsidiary companies, interest/profit receivables, security deposit, suspense account among others. Total other assets of the MTB at the end of September 2019 stood at BDT 14,195.58 million on solo basis.

Table 16: Details of Other Assets

30 September 2019

BDT mn

Income generating 3,528.39

Non-income generating other assets 10,667.18

Total Other assets 14,195.58

11.2 Description of Liabilities (Solo)

At the end of September 2019, total liabilities of Mutual Trust Bank Limited stood at BDT 234,169.69 million. Description of these liabilities are given below:

Table 17: Description of Liabilities

30 September 2019

BDT mn

Borrowing from other Banks, Financial Institutions & Agents 23,935.99

Subordinated Debt 7,400.00

Bills payable 1,471.68

Deposit and Other Accounts 182,335.45

Other Liabilities 18,546.45

Total 234,169.69

Borrowings from other banks, financial institutions and agents: MTB’s borrowing from other banks, financial institutions & agents stood at BDT 23,935.99 million at the end of September 2019. MTB borrowed BDT 16,081.59 million in Bangladesh and BDT 9,882.4 million from outside Bangladesh.

Table 18: Description of Borrowings

30 September 2019

BDT mn

In Bangladesh 16,081.59

Bangladesh Bank 9,232.5

Call & Term Borrowing from Other Banks and FIs 3,390.0

Outside Bangladesh 9,882.40

Borrowings from other banks, financial institutions and agents 23,935.99

Mutual Trust Bank Subordinated Bond: The Bank floated MTB 2nd Non- Convertible Subordinated Debt through private placement for BDT 3,000 million, date of issue October 20, 2015. Interest on the 10.50% to 13.50%. This non-convertible subordinated debt is payable half yearly from the date of Issue i.e. April and October of each year.

The Bank floated MTB 3rd Non-Convertible Subordinated Debt through private placement for BDT 5,000 million, date of issue February 16, 2017. Interest on the 7.00% to 10.50% This non-convertible subordinated debt is payable half yearly from the date of Issue i.e. February and August of each year.

At the end of September 2019, outstanding amount from the issuance of above mentioned subordinated bonds stood at BDT 7,400 million.

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Table 19: Outstanding Balance of Subordinated Bonds

SL No. Name of Subordinated Bond Outstanding Amount (in BDT mn.)

1 MTB 2nd Subordinated Debt 2,400

2 MTB 3rd Subordinated Debt 5,000

Total subordinated bond liability 7,400

Deposits and other accounts: Given the nature of its business, MTB’s major liabilities come in the form of deposits and other accounts. At the end of September 2019, MTB’s total deposits & other accounts stood at BDT 183,354.28 million.

Table 20: Description of Deposits and Other Accounts 30 September 2019

BDT mn

Current account and other accounts 14,665.72

Savings deposits 29,717.23

Fixed deposits 85,851.2

Other deposits 36,936.02

Total Deposit & Other Accounts 182,335.46

Other Liabilities: MTB’s other liabilities include various provisions including provision for classified and unclassified loans & advances, provision for off-balance sheet exposure, provision for income tax and others. At the end of September 2019, MTB’s other liabilities stood at BDT 19,488.31 million.

Table 21: Description of Other Liabilities

Provision for Loans and Advances 7,004,796,000

Provision for Off Balance Sheet Items 721,094,000

Provision against Shares in quoted companies 55,267,667

Provision for Other Asset 68,857,556

Provision for Income Tax 8,300,633,830

Provision for Gratuity 90,000,000

Provision for Good Borrower 14,301,000

Interest Suspense 1,825,956,215

Incentive Bonus Payable 8,899,051

Contribution to MTB Foundation -

Contribution to MTB Employees Welfare Fund 2,555

Accrued Expenses 18,277,216

Clearing House Adjustment 914,943

Interest Payable on Subordinated debt 175,426,029

Interest Payable on Borrowing 50,969,340

Liabilities Under Finance Lease 692,009

18,336,087,413

Offshore Banking Unit 295,618,168

Less: Inter transaction with Offshore Banking Unit (85,255,527)

18,546,450,054

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12 Description of Previously Issued Debt or Equity Securities

12.1 Initial Public Offering MTB Issued 4,000,000 shares of BDT 100 each through Initial Public Offering at 25% premium (@ BDT

125 each) in 2003. MTB collected BDT 600 million in cash as IPO proceedings and Paid-up capital was

increased by BDT 400 million.

12.2 Rights offering In the year 2008 MTB issued Right share at 5:1 ratio (20%) without any premium to enhance the capital

of the Bank. Just before the right issue the paid-up capital was BDT 1,247.4 million and the amount of

right issue was BDT 249.48 million. The offer was duly subscribed. The number of right shares issued

was 24,948,000.

12.3 MTB 1st Subordinated Bond Mutual Trust Bank Limited issued 250 (Two Hundred Fifty) fully redeemable non-convertible unsecured

subordinated bonds of BDT 10,000,000 (One Crore) each totaling BDT 2500,000,000 (Two Hundred Fifty

Crore) through private placement on 23 September 2010. The tenor of the bond was 07 years. Bangladesh

Securities and Exchange Commission vide its letter SEC/CI/CPLC-219/10-249 dated August 3, 2010 and

Bangladesh Bank vide its letter BRPD (BIC) 661/14B (P)2010-227 dated August 30, 2010 had given consent

to MTB (Mutual Trust Bank Limited) to raise Tier-2 Capital through issuance of the bond. MTB collected

BDT 2500,000,000 (Two Hundred Fifty Crore) from 22 institutional investors on 23 September 2010. The

below table shows the investors of the bond along with their respective investment amounts.

Amount in Crore Tk. Outstanding Sl#

Investors

Subscription Redemption

(As of Amount September

30, 2019.)

1 AK Khan & Co. Limited 36 Full -

2 Agrani Bank Limited 30 Full -

3 Dhaka Bank Limited 19 Full -

4 Sonali Bank Limited 25 Full -

5 IPDC of Bangladesh Limited 15 Full -

6 Rupali Bank Limited 20 Full -

7 Dutch Bangla Bank Limited 15 Full -

8 Bank Asia Liimted 15 Full -

9 Trust Bank Limited 11 Full -

10 BASIC Bank Limited 7 Full -

11 National Life Insurance Co. Ltd. 7 Full -

12 Janata Bank Limited 10 Full -

13 Central Depository Bangladesh Limited 7 Full -

14 NCC Bank Limited 4 Full -

15 Pubali Bank Limited 4 Full -

16 Prime Bank Employees Provident Fund 4 Full -

17 Popular Life Insurance Co. Ltd. 4 Full -

18 Delta Life Insurance Company Ltd. 4 Full -

19 Investment Corporation of Bangladesh 5 Full -

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20 Grameen Mutual Fund One- Scheme Two 4 Full -

21 Pragati Life Insurance Limited 2 Full -

22 Pacific Jeans Limited 2 Full -

Total 250

12.4 MTB 2nd Subordinated Bond Mutual Trust Bank Limited issued 300 (Three Hundred) fully redeemable non-convertible unsecured

subordinated bonds of BDT 10,000,000 (one crore) each totaling BDT 3000,000,000 (Three Hundred

Crore) through private placement on 20 October 2015. The tenor of the bond was 7 years. Bangladesh

Securities and Exchange Commission vide its letter BSEC/CI/DS/-29/412 dated August 24, 2015 and

Bangladesh Bank vide its letter BRPD (BFIS) 661/14B (P)2015-11985 dated September 27, 2015 had

given consent to MTB (Mutual Trust Bank Limited) to raise Tier-2 Capital through issuance of the bond.

MTB collected BDT 3000,000,000 (Three Hundred Crore) from 08 institutional investors on 20 October

2015. The below table shows the investors of the bond along with their respective investment amounts.

Amount in Crore Tk.

Subscription

Outstanding Sl# Investors Redemption (As of September

Amount

30, 2019.)

1 Sonali Bank Limited 100 40 60

2 BRAC Provident Fund 50 20 30

3 Bank Asia Limited 40 16 24

4 Uttara Bank Limited 30 12 18

5 BRAC 25 10 15

6 BRAC Bank Limited 25 10 15

7 NRB Commercial Bank Limited 20 8 12

8 United Finance Limited 10 4 6

Total 300 120 180

12.5 MTB 3rd Subordinated Bond Mutual Trust Bank Limited issued 500 (Five hundred) fully redeemable non-convertible unsecured

subordinated bonds of BDT 10,000,000 (One Crore) each totaling BDT 5000,000,000 (Five Hundred

Crore) through private placement on 16 February 2017. The tenor of the bond was 7 years. Bangladesh

Securities and Exchange Commission vide its letter BSEC/CI/DS/-29/2015/670 dated November 22,

2016 and Bangladesh Bank vide its letter BRPD (BFIS) 661/14B (P)2016-8316 dated December 20, 2016

had given consent to MTB (Mutual Trust Bank Limited) to raise Tier-2 Capital through issuance of the

bond. MTB collected BDT 5000,000,000 (Five Hundred Crore) from 11 institutional investors on 16

February 2017. The below table shows the investors of the bond along with their respective investment

amounts.

Amount in Crore Tk.

Outstanding

Sl#

Investors

Subscription Redemption

(As of Amount September 30,

2019.)

1 Pubali Bank Limited 95 - 95

2 Dhaka Bank Limited 90 - 90

3 Sonali Bank Limited 75 - 75

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4 Southeast Bank Limited 65 - 65

5 Janata Bank Limited 50 - 50

6 Agrani Bank Limited 30 - 30

7 Eastern Bank Limited 30 - 30

8 Rupali Bank Limited 20 - 20

9 Delta Life Insurance Company Limited 20 - 20

10 Standard Bank Limited 15 - 15

11 United Finance Limited 10 - 10

Total 500 - 500

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13 Auditors’ Report Along with Audited Financial Statements of Mutual Trust Bank Limited

Mutual Trust Bank Limited & its Subsidiaries

Auditors' report on consolidated and separate financial statements For the period of nine (9) months ended 30 September 2019

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14 Comparative Financial Statements of Mutual Trust Bank Limited for the Last 3 (Three) Years

14.1 Comparative Balance Sheet (Consolidated)

Mutual Trust Bank Limited & Its Subsidiaries Consolidated Balance Sheet

As on December 31

2018 2017 2016

BDT Mn BDT Mn BDT Mn

PROPERTY AND ASSET

Cash 12,301 13,077 11,263

In hand (incl. FCs) 2,521 2,191 1,987

Balance with Bangladesh Bank and its agent bank(s) (incl. FCs) 9,780 10,886 9,276

Balance with others bank and financial institutions 3,176 2,798 8,148

In Bangladesh 861 1,030 7,287

Outside Bangladesh 2,314 1,768 862

Money at call and on short notice 1,580 4,690 990

Investment 27,388 25,106 21,942

Government 24,421 22,703 19,627

Others 2,967 2,402 2,315

Loans, advances and lease/investments 166,145 145,607 114,356

Loans, cash credits, overdrafts, etc./Investments 163,394, 143,429 112,072

Bills purchased and discounted 2,750 2,178 2,284

Fixed assets incl. premises, furniture and fixtures 3,128 3,211 3,141

Other Asset 8,725 7,264 5,530

TOTAL ASSETS 222,444 201,754 165,370

LIABILITIES AND CAPITAL

Liabilities

Borrowings from other banks & FIs and agents 19,640 16,418 8,706

Mutual Trust Bank Subordinated Bond 7,400 8,000 4,250

Deposits and other accounts 166,160 151,776 131,272

Current account and other accounts 14,090 14,653 12,301

Bills payable 1,703 2,101 1,751

Savings bank deposits 28,239 27,479 23,710

Fixed deposit 77,043 67,114 55,803

Other deposits 45,083 40,429 37,706

Other Liability 15,964 13,797 11,323

Total Liabilities 209,165 189,991 155,552

Capital/Shareholders' Equity

Paid-up Capital 5,733 5,097 4,432

Statutory Reserve 4,096 3,622 3,188

Retained Earnings 1,722 1,722 841

Other Reserve 2,969 1,321 1,357

Minority Interest

0.125 0.124 0.122

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Total Equity 13,278 11,761 9,818

TOTAL LIABILITY AND EQUITY 222,444 201,754 165,370

14.2 Comparative Balance Sheet (Solo)


Balance Sheet

As on December 31

2018 2017 2016


PROPERTY AND ASSET

Cash 12,293 13,065 11,248

In hand (incl. FCs) 2,513 2,179 1,972

Balance with Bangladesh Bank and its agent bank(s) (incl. FCs) 9,780 10,886 9,276

Balance with others bank and financial institutions 2,964 2,355 8,020

In Bangladesh 648 586 7,158

Outside Bangladesh 2,315 1,768 861

Money at call and on short notice 1,580 4,690 990

Investment 26,589 24,578 21,422

Government 24,421 22,703 19,627

Others 2,168 1,875 1,795

Loans, advances and lease/investments 163,282 142,820 110,834

Loans, cash credits, overdrafts, etc./Investments 160,531 140,642 108,551

Bills purchased and discounted 2,751 2,178 2,284

Fixed assets incl. premises, furniture and fixtures 3,049 3,128 3,042

Other Asset 12,069 10,641 8,924

TOTAL ASSETS 221,828 201,278 164,480

LIABILITIES AND CAPITAL

Liabilities

Borrowings from other banks & FIs and agents 19,641 16,418 8,631

Mutual Trust Bank Subordinated Bond 7,400 8,000 4,250

Deposits and other accounts 166,701 152,238 131,594

Current account and other accounts 14,092 14,653 12,302

Bills payable 1,703 2,101 1,751

Savings bank deposits 28,239 27,479 23,710

Fixed deposit 77,143 67,114 55,803

Other deposits 45,523 40,891 38,027

Other Liability 15,054 12,955 10,222

Total Liabilities 208,796 189,610 154,697

Capital/Shareholders' Equity

Paid-up Capital 5,734 5,097 4,432

Statutory Reserve 4,096 3,622 3,188

Retained Earnings 1,934 1,632 815

Other Reserve 1,267 1,316 1,349

Minority Interest - -

Total Equity 13,031 11,668 9,784

TOTAL LIABILITY AND EQUITY 221,828 201,278 164,480

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14.3 Comparative Profit & Loss Account (Consolidated)

Mutual Trust Bank Limited & Its Subsidiaries Consolidated Profit and Loss Account

For the year ended 31

OPERATING INCOME Interest income/profit on investments Interest Expenses Net interest income Income from Investment Commission, exchange

and brokerage Other operating income

Total operating income OPERATING EXPENSES

2018 2017 2016

BDT BDT BDT Mn Mn Mn

15,687 12,161 11,381 (10,436) (7,853) (7,503)

5,251 4,308 3,878

2,343 2,127 2,011 1,683 1,578 1,228

552 474 398

4,578 4,179 3,637

9,829 8,487 7,515

Salary and allowances 2,712 2,403 2,256 Rent, taxes, insurance, electricity, etc 696 664 602 Legal expenses 3 4 3 Postage, stamps, telecommunication, etc. 15 11 9

Stationery, printing, advertisement, etc. 125 109 83 Chief executive's salary and fees 19 18 17 Directors' fees 3 3 3 Auditors' fees 2 2 3

Depreciation and repairs of Bank's assets 464 430 391 Other expenses 905 927 739

Total operating expenses 4,945 4,571 4,107 Profit before provision 4,884 3,916 3,408

Provision against loans and advances 2,224 445 722 General provision for loans and advances 0.591 909 43

Other provisions 118 303 182

Total provision 2342 1,656 947

Profit before tax 2,542 2,259 2,461

Less: Income tax expenses 807 279 998 Current Tax 1,048 1,180 961 Deferred Tax expense / (Income) (241) (901) 37

Net Profit 1,734 1,980 1,464

Shareholders’ of the bank 1,734 1,980 1,464 Minority Interest 0.003764 0.002547 0.002461

Retained surplus brought forward 1,722 841 753 3,457 2,822 2,216

Appropriations

Bonus share issued 637 665 739 Transferred to statutory reserve 474 434 467 Transferred to General reserve 170 170

1,281 1,099 1,375

Retained surplus carried forward 2,176 1,722 841

Earnings Per Share (EPS) 3.03 3.45 2.87

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14.4 Comparative Profit & Loss Account (Solo)

Mutual Trust Bank Limited Profit and Loss Account

For the year ended 31

OPERATING INCOME

Interest income/profit on

investments Interest Expenses

Net interest income Income from

Investment Commission, exchange

and brokerage Other operating

income Total operating income OPERATING EXPENSES

2018 2017 2016


15,542 12,102 11,250

(10,451) (7,856) (7,506)

5,090 7,506 3,744

2,239 2,056 1,974

1,548 1,342 1,066

512 418 360

4,300 3,817 3,401

9,390 8,064 7,145

Salary and allowances 2,621 2,314 2,168

Rent, taxes, insurance, electricity, etc 659 624 559

Legal expenses 3 3 3

Postage, stamps, telecommunication, etc 13 6 8

Stationery, printing, advertisement, etc 123 99 81

Managing Director's salary and fees 19 18 17

Directors' fees 2 1 1

Auditors' fees 1 1 1

Depreciation and repairs of Bank's assets 455 420 379

Other expenses 883 902 715

Total operating expenses 4,782 4,391 3,937

Profit before provision 4,608 3,673 3,208

Specific Provisions 2,223 444 1,994.8

General Provisions 591 908 -

Off Balance-sheet provisions 5 137 200.0

Other 10 10 11

Total provision 2,239 1,500 875

Profit before tax 2,368 2,172 2,333

Income Tax Expenses (786) 256 929

Current Tax 1,027 1,157 897

Deferred Tax (240) (901) 32

Net Profit 1,582 1,916 1,403

Retained Surplus brought forward 1,632 815 786

3,214 2,731 2,190

Bonus Shares Issued During the Year 637 664 738

Statutory Reserve 473 434 466

General Reserve 170 - 170

1,280 1,099 1,375

Retained surplus 1,934 1,632 815

Earnings Per Share (EPS)

2.76 3.34 2.75

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14.5 Comparative Cash Flow Statement (Consolidated)

Mutual Trust Bank Limited & Its Subsidiaries Consolidated Cash Flow Statement

As at December 31

2018 2017 2016


Cash flows from operating activities

Interest receipts

17,846 13,897 13,302

Interest payments (9,890) (7,757) (7,896)

Dividend receipts 83 172 66

Fees and commission receipts 1,682 1,578 1,228

Recoveries of loans previously written off 0.96 1.2 0.9

Payments to employees (2,730) (2,420) (2,273)

Payments to suppliers (124) (108) (83)

Income taxes paid (1,012) (1,056) (731)

Receipts from other operating activities 738 522 443

Payments for other operating activities (1,745) (1,697) (1,411)

Operating profit before changes in operating assets & liabilities 4,848 3,130 2,645

Increase / (decrease) in operating assets and liabilities

Loans and advances to customers (20,560) (31,224) (16,756)

Other assets (512) (535) (187)

Deposits from other banks / borrowings 750 10,149 -

Deposits from customers 13,074 10,372 13,311

Trading liabilities 3,223 7,711 3,624

Other liabilities (970) 424 559

(4,995) (3,102) 551

Net cash from operating activities (146) 28 3,197

Cash flows from investing activities Purchase of government securities (1,933) (3,111) 3,334

Purchases of trading securities, shares, bonds, etc. (564) (87) 369

Purchase of property, plant and equipment (261) (413) (297)

Net cash used in investing activities (2,759) (3,612) (3,406)

Cash flows from financing activities Increase /(decrease) of long-term borrowings (600) 3750 625

Dividend paid - - -

Net cash used in financing activities (600) 3750 625

Net increase / (decrease) in cash and cash equivalents (3,506) 165 5,979

Effects of exchange rate changes on cash and cash Equivalents (1.5) (1.2) 5

Cash and cash equivalents at beginning of the year 20,567 20,402 14,418

Cash and cash equivalents at end of the year * 17,059 20,567 20,402

*Cash and cash equivalents:

Cash 2,520 2,191 1,987

Prize bonds 1.8 1.7 1.3

Money at call and short notice 1,580 4,690 990

Balance with Bangladesh Bank and its agent bank(s) 9,780 10,885 9,275

Balance with other banks and financial institutions 3,176 2,798 8,148

17,059 20,567 20,402

(0.26) 0.05 6.2

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14.6 Comparative Cash Flow Statement (Solo)


Cash Flow Statement

As at December 31

2018 2017 2016


Cash flows from operating activities

Interest receipts

17,701 13,840 13,171

Interest payments (9,905) (7,751) (7,899)

Dividend receipts 60 155 54

Fees and commission receipts 1,548 1,342 1,066

Recoveries of loans previously written off 0.96 1.2 9

Payments to employees (2,640) (2,332) (2,186)

Payments to suppliers (123) (107) (81)

Income taxes paid (962) (983) (688)

Receipts from other operating activities 617 421 382

Payments for other operating activities (1,682) (1,627) (1,342)

Operating profit before changes in operating assets & liabilities 4,614 2,959 2,477

Increase / (decrease) in operating assets and liabilities

Loans and advances to customers (20,484) ((31,958) (14,607)

Other assets (474) (128) (2,180)

Deposits from other banks / borrowings (750) 10,149 -

Deposits from customers (13,154) 10,512 13,350

Trading liabilities 3,223 7,786 3,549

Other liabilities 968 131 406

(9,943.2) (3,250) (518)

Net cash from operating activities (9,183.6) (290) (2,996)

Cash flows from investing activities Purchase of government securities 1,933 3,111 (3,334)

Purchases of trading securities, shares, bonds, etc. 293 79 455

Purchase of property, plant and equipment 258 418 (298)

Net cash used in investing activities (258) (3,608) 3,490

Cash flows from financing activities Increase /(decrease) of long-term borrowings 600 3,750 625

Dividend paid - - -

Net cash used in financing activities (600) 3,750 625

Net increase / (decrease) in cash and cash equivalents (3,270) (149) 5,862

Effects of exchange rate changes on cash and cash Equivalents (2) (3) (1)

Cash and cash equivalents at beginning of the year 20,112 20,258 14,396

Cash and cash equivalents at end of the year * 16,839 20,112 20,258

*Cash and cash equivalents:

Cash 2,512 2,179 1,971

Prize bonds 1.8 1.7 1.3

Money at call and short notice 1,580 4,690 990

Balance with Bangladesh Bank and its agent bank(s) 9,780 10,885 9,275

Balance with other banks and financial institutions 2,963 2,355 8,019

16,839 20,112 20,258

(0.32) (0.51) (5.8)

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15 Financial Ratios for last 3 (Three) Years

Table 22: Financial Ratios of MTB for Last Three Years

Sl. Particulars Metric 2019 (Till Sep.) 2018 2017

1 Current Ratio N/A N/A N/A N/A 2 Quick Ratio N/A N/A N/A N/A 3 Times Interest Earned Ratio N/A N/A N/A N/A 4 Break-Even Point N/A N/A N/A N/A 5 Debt to Equity Ratio N/A N/A N/A N/A 6 Debt to Total Asset Ratio N/A N/A N/A N/A 7 Accounts Receivable Turnover Ratio N/A N/A N/A N/A 8 Inventory Turnover Ratio N/A N/A N/A N/A 9 Asset Turnover Ratio N/A N/A N/A N/A 10 Debt Service Coverage Ratio N/A N/A N/A N/A 11 Gross Margin Ratio N/A N/A N/A N/A 12 Operating Income Ratio N/A N/A N/A N/A 13 Net Income Ratio N/A N/A N/A N/A 14 Cost of Fund % - 8.63% 7.88% 15 Loan Deposit Ratio % 81.92% 82.83% 83.45% 16 Cost Income Ratio % 50.77% 50.31% 53.86% 17 Return Avg. Assets % 0.52% 0.82% 1.08% 18 Capital Adequacy Ratio % 12.40% 12.86% 13.76% 19 Non-performing Loan Ratio % 6.62% 5.39% 4.30% 20 Return on Avg. Equity % 8.65% 13.85% 18.35% 21 Earnings Per Share BDT 1.9 3.03 3.89 22 NAV per Share BDT 22.78 23.16 23.08

* The Issuer of Subordinated Bond i.e. Mutual Trust Bank Limited operates in banking industry which is a service industry. Considering the business nature of the Issuer, only relevant financial ratios have been presented above.

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16 Credit Rating Report of the Issue

Credit Rating Report

Non-Convertible Subordinated Bond (Up to BDT 5,000 million) of Mutual

Trust Bank Limited

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17 Description of the Trustee EBL Investments Limited (EBLIL) shall act as the Trustee for MTB 4th Subordinated Bond subject to regulatory approval.

17.1 Overview to the Trustee EBL Investments Limited (EBLIL was incorporated in Bangladesh with the Registrar of Joint Stock Companies and Firms (RJSCF) vide registration no. C 81417/09 dated 30 December 2009 as a Private Limited Company under the Companies Act, 1994 and obtained required merchant banking license from BSEC in 27 January 2013. This Company is a fully owned subsidiary of Eastern Bank Limited. EBLIL is well equipped with skilled human resources and business set up to start full-fledged operations from July,2013. The registered office of the company is situated at 111 Kazi Nazrul Islam Avenue, Banglamotor, Dhaka-1000, Bangladesh.

17.2 Board of Directors:

Mr. Mohd. Noor Ali, Chairman Mr. Mohd. Noor Ali is a prominent business personality of the country and also the Chairman & Managing Director of Unique Group, the renowned business conglomerate in Bangladesh, having interest in Real Estate, Hotel Services, Ceramic Industry, Air Travel, Aviation Services, Electrical Power Plants, Tourism, Manpower Export, Banking Services, Housing Finance & Investment, Supply, Indenting, Commission Agents, Human Resources Development and many other. Mr. Ali is perhaps the only Bangladeshi who has ventured to set up a 5-Star Hotel in private sector. The Westin Dhaka is already very popular amongst the local and foreign community. He accomplished his honors & Masters of Social Science in Sociology from the University of Dhaka. Mr. Mohd. Noor Ali is also involved in many social activities and member of various trade associations. He is a widely travelled person across the globe on business trips.

Mr. Meah Mohammed Abdur Rahim, Director Meah Mohammed Abdur Rahim, Director of EBL Investments Limited is a renowned businessman. He is the Managing Director of Ancient Steamship Company Limited and Hudig & Meah (Bangladesh) Limited. He is also a Director of Eastern Bank Ltd. (EBL) and the Chairman of the Audit Committee and also a Member of the Risk Management Committee (RMC) of the Board of Directors of the Bank (EBL). Academically & professionally, Mr. Rahim obtained Bachelor of Commerce Degree, Diploma in Banking & Business Studies as well as Diploma in Shipping, A.I.C.S. He has expertise in the areas of Business Studies, Banking, Finance, Management etc. He is involved in many social activities and is also a widely travelled person across the globe on business trips.

Mr. Ali Reza Iftekhar, Director A visionary banker and a dynamic leader, Mr. Ali Reza Iftekhar is an ardent promoter of the concept of sustainable development. As the CEO and MD of Eastern Bank Limited he has successfully introduced international best practices and ethical banking and transformed the organization into the most valuable financial brand in the country. Under his leadership, the bank has achieved many a laurel including the Best Retail Bank in Bangladesh awarded by The Asian Banker for five consecutive years 2013-2017; ICSB National Award 2014 for Corporate Governance Excellence; the Best Financial Institution 2010 at the DHL-Daily Star Bangladesh Business Award. He also sits on the Board of the International Leasing and Financial Services Limited (ILFSL). Mr. Iftekhar is a 1982 graduate from the University of Dhaka in Marketing. His specialization in risk

management, corporate banking, operations and retail made him one of the leading bankers of the country. He

attended Harvard Business School Program on Leadership in Financial Organizations in 2012. He also

participated in the Strategic Leadership Program at University of Oxford, UK in 2013. Furthermore, Mr.

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Iftekhar took part in Executive Program in Corporate Governance and Strategic Management at Haas School of Business, University of California, Berkeley in 2014 Mr. Md. Sayadur Rahman, Director Mr. Md. Sayadur Rahman is the Managing Director of EBL Securities Limited, Member: Dhaka Stock Exchange Limited & Chittagong Stock Exchange Limited. He is treated capital market expect of the country having 26 years’ job experience in different financial institutions like Bank, Leasing, Merchant Bank, Brokerage etc. He has completed Masters in Management from University of Dhaka, MBA from Dhaka Campus of Honolulu University, USA and LLM from World University of Bangladesh.

Mr. Tahid Ahmed Chowdhury, Fcca (Uk), Ex-Officio Director & Managing Director Mr. Tahid Ahmed Chowdhury, FCCA (UK) is currently serving as the Managing Director of EBL Investments Limited. Prior to the position he was Managing Director & CEO of Citizen Securities & Investment Ltd. He is one of the youngest Managing Director in Merchant Banking industry of Bangladesh. He is a London qualified Chartered Certified Accountant holding FCCA membership of the Association of Chartered Certified Accountants. Mr. Chowdhury also completed his B.Sc (Hons) in Applied Accounting from Oxford Brookes University (UK). Mr. Chowdhury is a highly experienced and qualified professional having knowledge of global corporate business management and served in various institutions in England as well as Bangladesh. He started his career with KPMG, Bangladesh as an auditor. Since then he has worked with different Chartered Accountants firm in England as Auditor and Senior Accountant, has also extensive experience working with renowned Merchant Banks in Bangladesh.

17.3 Product and Services 17.3.1 Non-Discretionary Portfolio Management:

EBL Investments provides non-discretionary services under its Investors Portfolio account services department. The department is taking care of the accounts according to the instruction of the investors. They are capable handle order properly and efficiently through their sister concern EBL Securities Ltd.

17.3.2 Discretionary Portfolio Management:

In determining the structure of underlying asset-class performance fees for their Discretionary Solutions, they have sought to standardize the basis for investment-manager remuneration. Performance-based fees are set at levels that rewards for desired outperformance without encouraging undue risk-taking. In determining a fair and equitable performance-based fee, they consider the mandate of each portfolio to devise a basis that is consistent with the desired investment return and expected risk of the portfolio. They structure their underlying performance fees with a number of key elements to ensure fair treatment of all parties and alignment of interest

17.3.3 Monthly Investments Scheme:

EBLIL introduced capital market product through Monthly Investment Scheme named SANCHAY as a new investment vehicle. A person will deposit a certain amount of money in each month within life time of the scheme and fund manager will build portfolios gradually on periodical basis. The scheme is managed by professional fund manager under risk management tools and attempted to give maximum benefits to the scheme owners.

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17.3.4 Other Services:

Primary Market Debt Capital Corporate Advisory

Secondary Market Operations Management Operations

• Initial Public Offerings • Loan Syndications • Mergers and • Clients Trade (IPO) • Trustee Services Acquisitions Execution (Non-

• Repeat Public • Private Placement • Capital Structure Discretionary)

Offering (RPO) o Zero Coupon Restructuring • Discretionary portfolio

• Rights Issue Offering Bond • Business Feasibility Management • Underwriting (IPO, o Subordinated Study • CDBL Process

RPO, Rights & Bonds) Bond • New Company Management • Registrar to the issue Formation and • IPO and Rights

Regulatory Approval Application Processing • Pre-IPO Capital on behalf of clients

Raising, BSEC • Research Report on

approval and arranging Market, Sector and

Individual Stock

.

17.3.5 Key Operational Results

EBL Investments Limited is one of the prominent merchant banks in Bangladesh. The following table shows the financial position of the company.

Table 23: Key Financials of the Trustee

In BDT Million Particulars December 31, 2018 December 31, 2017 December 31, 2016

Total Assets 427.52 441.65 381.80

Shareholders’ Equity 333.50 311.02 330.96

Paid up Capital 300.00 300.00 300.00

Investments 161.11 199.73 142.59

Total Operating Income 49.46 104.03 60.12

Profit Before Provision 32.65 75.11 46.630

Net Profit After Tax 22.48 60.06

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18 Due Diligence of the Trustee

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19 Modus Operandi of the Issue including

19.1 Application Procedure: The Bonds shall be distributed through private placement.

Each investor (Bondholder) shall enter into a separate Subscription Agreement with the Issuer and shall be bound by the terms and conditions contained in such Subscription Agreement which includes detail rights and obligations of the investors.

Undertaking to Issue The Issuer will, subject to and in accordance with the provisions of the Subscription Agreement, on the Closing Date, duly execute and deliver to the Bondholder a Bond Certificate attached with the Conditions, representing the allocation amount of Bonds subscribed.

Undertaking to Subscribe The Bondholders will, subject to and in accordance with the provisions of the Subscription Agreement, on the Closing Date, subscribe and pay the aggregate purchase price for the allocation, in Bangladesh Taka for same day value to such account as the Issuer designates.

19.2 Allotment: Form and Denomination

The Bonds, (each, a “Series”) are issued in registered form via private placement in a minimum denomination of each lot of Bond indicated at BDT 10,000,000 Face Value and integral multiples thereof. The Bonds will be issued by the Issuer in the name of the Bondholders at the Issue Price. A bond certificate (each a "Bond Certificate") will be issued to each Bondholder in respect of its registered holding of each series of Bonds. Each Bond and each Bond Certificate will be numbered serially with an identifying number which will be recorded on the relevant Bond Certificate and in the register of Bondholders (the “Register”), the Issuer and a copy of which will be kept by the Registrar. The Issuer may, without the consent of the Bondholders of a Series, create and issue other Series of Bonds with the same terms and conditions as the Bonds (except for the Issue Date and the Redemption Date).

Title

Title to the Bonds passes only by transfer and registration in the Register. A registered Bondholder shall (except as otherwise required by law) be treated as the absolute owner of such Bond for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any other interest therein, any writing on the Bond Certificate relating thereto (other than the endorsed Instrument of Transfer) or any notice of any previous loss or theft of such Bond Certificate) and no person shall be liable for so treating such Bondholder. In these provisions “Bondholder” and (in relation to a Bond) “Holder” means the person in whose name a Bond is registered in the Register as owner of the Bond. In the event of any inconsistency between the Register, the record of the holders in the Register shall prevail.

Register

The Registrar will maintain an authoritative Register in respect of the Bonds, in accordance with the

provisions of the Agency Agreement. The “Holder” of a Bond means the person in whose name such

Bond is for the time being registered in the Register (or, in the case of a joint holding, the first named

thereof) and “Bondholder” shall be construed accordingly. The Register shall be prima facie evidence

of any matter in relation to the rights under the Bonds except as ordered by a court of competent

jurisdiction or as required by applicable law. Bondholders and the Trustee shall

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be entitled to inspect the Register and take copies therefrom upon payment of fees as may be prescribed by the Issuer from time to time.

19.3 Transfer: Subject to Closed Periods and Regulations Concerning Transfers and Registration of the Trust Deed, a

Bond may freely be transferred to another Eligible Person in Bangladesh (a “Transferee”) upon surrender

of the Bond Certificate issued in respect of that Bond, together with a duly completed and executed

instrument of transfer (in the form attached to the Bond Certificate, a “Instrument of Transfer”) by the

registered holder of the Bond, as transferor (the “Transferor”) or the proposed Transferee. A valid

Instrument of Transfer shall be duly stamped, completed and executed by both the Transferor and the

Transferee. If the Transferor or the Transferee is a body corporate, such Instrument of Transfer shall be

executed by the authorized persons of the Transferor or the Transferee, as the case may be. Upon receipt

of the Bond Certificate issued in respect of the Bond to be transferred along with the duly completed and

executed Instrument of Transfer at the Specified Office of the Transfer Agent, together with such

evidence as such Transfer Agent may reasonably require to prove (i) the title of the Transferor and (ii) the

signature and authority of each of the individuals who have executed the Instrument of Transfer on behalf

of the Transferor and the Transferee. Upon receipt of the Bond Certificate, the Instrument of Transfer

and the other supporting documents named above, the Transfer Agent, as the duly authorized delegate of

the Issuer’s Board of Directors, shall approve and certify the transfer on behalf of the Board of Directors

of the Issuer. If the Transfer Agent refuses to register the transfer of any Bond it shall immediately

provide notice of such refusal to the Issuer. If the Issuer does not agree with the Transfer Agent’s refusal

to approve and certify such transfer, it shall within 3 (three) Business Days of receipt of such notice from

the Transfer Agent, direct the Transfer Agent to approve and certify the transfer as requested in the

relevant Instrument of Transfer. If the Issuer agrees with Transfer Agent that the requested transfer

should be refused, the Issuer shall, within 30 (thirty) days from the date on which the relevant Instrument

of Transfer was lodged with the Transfer Agent, send or cause to be sent notice of such refusal to both

the Transferor and the Transferee. Where it is proved to the satisfaction of the Issuer that a duly

completed and executed Instrument of Transfer has been lost, the Issuer may, in its discretion, on

application in writing made by the Transferee and bearing such stamp as is required by an Instrument of

Transfer, register such transfer on such terms as to indemnity as the Issuer may think fit. Where not all the

Bonds represented by the surrendered Bond Certificate are the subject of the transfer, a new Bond

Certificate in respect of the balance of the Bonds will be issued to the transferor.

19.4 Repayment: Principal

The principal of the Bonds in each tranche to be redeemed in 5 (five) equal annual instalments commencing at the end of 3rd year from the Issue Date of that tranche and each one year from there after unless otherwise agreed amongst the Trustee and the Issuer. However, the Bonds may be redeemed at the option of the Issuer in whole, but not in part, together with any accrued & unpaid coupon, subject to the consent of the appropriate authorities. Interest

The Issuer hereby covenants that from (and including) the Issue Date up to (but excluding) the Maturity Date, the Issuer will pay to the Bondholders coupon on each Subordinated Bond at the Coupon Rate.

The first coupon payment of a tranche shall be made on the date falling six (6) months after the Issue Date of that tranche. The first coupon payment shall be calculated for the period commencing from the Issue Date up to the aforesaid date of first coupon payment (inclusive of the date of commencement, but excluding the date of expiry). Thereafter, coupon calculated for each subsequent six (6) month period (inclusive of the date of commencement, but excluding the date of expiry) shall be payable semi-annually in arrears. The date of expiry of each six (6) month period commencing from the Issue Date shall be known as the "Coupon Payment Date" and the

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final Coupon Payment Date shall be the Maturity Date or such other date determined in accordance with Condition 12.3.1 (c) of the Trust Deed. If any Coupon Payment Date would otherwise fall on a day which is not a Business Day, the date on which payment shall be made shall be next Business Day. A holder of a Bond shall not be entitled to any payment in respect of any delay in payment resulting from the due date for a payment not being a Business Day. All coupon payments shall be calculated based on the outstanding nominal value of the Subordinated Bonds as at the day immediately preceding the Coupon Payment Date.

Every payment by the Issuer to the Bondholders in respect of the coupon shall be in satisfaction pro tanto of the covenant by the Issuer contained in this Condition and the obligations and liabilities of the Issuer with regard to that coupon payment.

19.5 Event of Default Events of Default The occurrence of the following event shall constitute an Event of Default: -

the Issuer defaults in the payment of any money owing in respect of the Subordinated Bonds (whether principal or coupon payment) when the same shall become due and payable in accordance with these presents and such default continues for at least seven (7) Business Days.

a court order is made or an effective resolution is passed for the winding-up of the Issuer.

19.6 Termination and Final Settlement

(A) Termination

The Investor may give a termination notice to the Issuer at any time on or prior to the Closing Date if:

Breach of undertaking and obligations: the Issuer fails to perform any of its undertaking and obligations under this Agreement;

Failure of condition precedent: any of the conditions precedent is not satisfied or waived by the Bondholders on the Closing Date; or

Force majeure: since the date of the Subscription Agreement there has been (i) any material outbreak or escalation of hostilities involving Bangladesh or declaration by Bangladesh of a national emergency or war or other calamity or crisis or (ii) a material adverse change in economic, political or financial conditions or currency exchange rates or exchange controls in Bangladesh or international market, of such magnitude and severity in its effect on the financial markets as to make it impracticable or inadvisable to proceed with the offer, sale, distribution or delivery of the Bonds.

Consequences

Upon the giving of a termination notice under Clause 16.10 of the MTB 4th Subordinated Bond Trust (the Trust Deed) (Termination) and subject to the Subscription Agreement:

Discharge of Issuer: the Issuer shall be discharged from performance of its obligations under the Subscription Agreement except for the liability of the Issuer in relation to expenses related to the Bonds and except for any liability arising before or in relation to such termination; and

Discharge of Bondholder: such Bondholder shall be discharged from performance of their respective obligations under the Subscription Agreement.

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Interests of the Bondholders: The interests of the Bondholders shall be protected and preserved by the Trustee in the manner described in the Trust Deed.

(B) Final Settlement

The principal of the Bonds in each Tranche to be redeemed in 5 (five) equal annual instalments commencing at the end of 3rd year from the Issue Date of the respective Tranche and each one year from there after unless otherwise agreed amongst the Trustee and the Issuer:

Instalment

Redemption Rate Redemption Date

(% of aggregate principal amount

(End of year from the Issue Date No.

in every Tranche)

of the respective Tranche)

1 20.0% 3rd

2 20.0% 4th

3 20.0% 5th

4 20.0% 6th

5 20.0% 7th

The Redemption Instalment stated above cannot be changed or amended without prior approval of the Bangladesh Bank and consent of the Issuer.

19.7 Indemnification The Issuer shall fully indemnify the Bondholder(s) from and against any expense, loss, damage or liability which any of them may incur in connection with the enforcement, protection or preservation of any right or claim of the Bondholders under the Transaction Documents.

19.8 Cancellation All Bonds which are redeemed by the Issuer, will forthwith be cancelled.

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